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EQUIPMENT FINANCING AGREEMENT
dated as of
October 31, 1997
by and between
XXXXX INTERNATIONAL (BRAZIL), LTD.
and
MOTOROLA CREDIT CORPORATION
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TABLE OF CONTENTS
PAGE
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SECTION 1. DEFINITIONS ..................................................... 2
Section 1.01 Defined Terms ............................................ 2
Section 1.02 Interpretation ...........................................25
Section 1.03 Accounting Principles and Terms ..........................25
SECTION 2. ADVANCES ........................................................26
Section 2.01 The Commitment ...........................................26
Section 2.02 Procedure for Borrowing ..................................26
Section 2.03 Financing Note ...........................................28
Section 2.04 Repayment of Principal of Advances .......................28
Section 2.05 Prepayments ..............................................29
Section 2.06 Interest .................................................31
Section 2.07 Payments .................................................32
Section 2.08 Use of Proceeds ..........................................33
Section 2.09 Change in Law ............................................33
Section 2.10 Illegality ...............................................33
SECTION 3. FUNDING AND YIELD PROTECTION ....................................34
Section 3.01 Taxes, Duties, Fees and Charges ..........................34
Section 3.02 Change in Circumstances ..................................34
SECTION 4. EXPENSES; INDEMNIFICATION; FEES .................................36
Section 4.01 Expenses .................................................36
Section 4.02 Indemnification ..........................................36
SECTION 5. STOCKHOLDER GUARANTIES ..........................................37
Section 5.01 Stockholder Guaranties ...................................37
Section 5.02 Foreign Affiliate Guaranties .............................38
SECTION 6. SECURITY ........................................................38
Section 6.01 Security .................................................38
SECTION 7. REPRESENTATIONS AND WARRANTIES ..................................42
Section 7.01 Organization .............................................42
Section 7.02 Power; Authority .........................................43
Section 7.03 Governmental Approvals; Licenses .........................43
Section 7.04 Execution, Enforceability, Violation of Law and
Agreements ...............................................45
Section 7.05 Financial Statements; Business Plan ......................46
Section 7.06 Taxes ....................................................47
i
Section 7.07 Properties ...............................................47
Section 7.08 Compliance with Laws .....................................48
Section 7.09 Intellectual Property ....................................49
Section 7.10 Burdensome Documents; Agreements with Affiliates;
Other Agreements .........................................49
Section 7.11 Security Documents .......................................50
Section 7.12 Judgments, Actions, Proceedings ..........................50
Section 7.13 No Defaults ..............................................50
Section 7.14 Strikes ..................................................51
Section 7.15 Sufficiency of System Documents ..........................51
Section 7.16 Delivery of System Documents and Licenses ................51
Section 7.17 Accuracy of Information ..................................51
Section 7.18 Business .................................................52
Section 7.19 Survival of Representations and Warranties ...............52
Section 7.20 ERISA ....................................................52
Section 7.21 Regulation ...............................................54
Section 7.22 Use of Proceeds ..........................................54
Section 7.23 Investment Company .......................................54
Section 7.24 Capital Contributions ....................................54
Section 7.25 Bank Accounts ............................................55
Section 7.26 Inactive Foreign Affiliates ..............................55
SECTION 8. AFFIRMATIVE COVENANTS ...........................................55
Section 8.01 Performance of Obligations ...............................55
Section 8.02 Annual Financial Statements ..............................56
Section 8.03 Quarterly Financial Statements ...........................57
Section 8.04 Other Information ........................................58
Section 8.05 Access to Books; Inspections .............................59
Section 8.06 Governmental Approvals ...................................60
Section 8.07 Insurance ................................................60
Section 8.08 Continuance of Business ..................................61
Section 8.09 Required Equity Investment ...............................61
Section 8.10 Maintenance and Repairs ..................................62
Section 8.11 Compliance with Law ......................................62
Section 8.12 Notices ..................................................64
Section 8.13 Security; Further Assurances .............................65
Section 8.14 Construction of the System ...............................67
Section 8.15 Restricted Assets; Option Companies ......................67
Section 8.16 Maintenance of Licenses ..................................68
Section 8.17 Financial Covenants ......................................68
Section 8.18 Proposed Consolidation ...................................69
Section 8.19 Failure to Perform of Stockholder Guarantor ..............70
Section 8.20 Adult Content ............................................70
ii
Section 8.21 Translation and Registration .............................70
Section 8.22 Foreign Resident Account .................................70
SECTION 9. NEGATIVE COVENANTS ..............................................70
Section 9.01 Indebtedness .............................................71
Section 9.02 Guaranties ...............................................71
Section 9.03 Transfer .................................................71
Section 9.04 Liens ....................................................71
Section 9.05 Mergers; Acquisitions ....................................72
Section 9.06 Distributions; Redemptions ...............................72
Section 9.07 Stock Issuance ...........................................73
Section 9.08 Amendment of Documents and Organization ..................73
Section 9.09 Loans; Advances ..........................................74
Section 9.10 Use of Funds .............................................75
Section 9.11 Transactions with Affiliates .............................75
Section 9.12 Changes in Business ......................................75
Section 9.13 Prepayments ..............................................76
Section 9.14 Additional System Documents ..............................76
Section 9.15 ERISA Obligations ........................................76
Section 9.16 Sale and Leaseback Transactions ..........................77
Section 9.17 New Subsidiaries .........................................77
Section 9.18 Restricted Assets and Option Companies ...................77
Section 9.19 Bank Accounts ............................................77
Section 9.20 Bankruptcy ...............................................77
SECTION 10. CONDITIONS PRECEDENT ...........................................78
Section 10.01 Conditions to Initial Advance ............................78
Section 10.02 Conditions to All Advances ...............................83
SECTION 11. EVENTS OF DEFAULT ..............................................85
Section 11.01 Events of Default ........................................85
Section 11.02 Remedies .................................................89
Section 11.03 Cumulative Rights ........................................92
Section 11.04 Waiver of Demand .........................................92
Section 11.05 Waiver of Notice .........................................92
SECTION 12. MISCELLANEOUS ..................................................92
Section 12.01 Waiver of Sovereign Immunity .............................92
Section 12.02 Venue for Suit ...........................................93
Section 12.03 Governing Law ............................................94
Section 12.04 Severability of Provisions ...............................94
Section 12.05 Binding Effect; Assignment ...............................94
Section 12.06 Entire Agreement; Amendments .............................95
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Section 12.07 Notices ..................................................95
Section 12.08 Right of Set-Off .........................................96
Section 12.09 Counterparts .............................................96
Section 12.10 Proposed Consolidation ...................................96
Section 12.11 Termination of Stockholder Guarantor's Obligations .......97
Section 12.12 Confidentiality ..........................................97
Section 12.13 Term of Agreement ........................................98
Exhibit A - Approved Business Plan
Exhibit B - Form of Consent to Assignment
Exhibit C - Form of Drawdown Certificate
Exhibit D - Form of Request for Financing
Exhibit E - Invested Capital Schedule
Exhibit F - Form of Financing Note
Exhibit G - Form of Waiver of Lessor Lien Language to be inserted in
Lease
Exhibit H - Intentionally Omitted
Exhibit I-1 - Form of Nextel International Guaranty
Exhibit I-2 - Form of Motorola do Brasil Guaranty
Exhibit J - Form of Foreign Affiliate Guaranty
Exhibit K - Form of Company Security Agreement
Exhibit L - Form of Company Security Deposit Agreement
Exhibit M-1 - Form of Lease Assignment Agreement MSO Site
Exhibit M-2 - Form of Lease Assignment Agreement for Future Leases
Exhibit N-1 - Form of Company Quota Pledge Agreement
Exhibit N-2(a) - Form of Company Share Pledge Agreement (AirLink)
Exhibit N-2(b) - Form of Company Share Pledge Agreement (Xxxxxx Xxxxx)
Exhibit N-3 - Form of Company Promise to Pledge Quotas
Exhibit N-4 - Form of Amendment to Company Quota Pledge Agreement
Exhibit N-5 - Form of Amendment to Company Share Pledge Agreement
Exhibit O - Form of Guarantor Pledge Agreement
Exhibit P - Form of Telcom Pledge Agreement
Exhibit Q-1 - Form of Foreign Affiliate Security Agreement
Exhibit Q-2 - Form of Amendment to Foreign Affiliate Security Agreement
Exhibit R - Form of Foreign Affiliate Trademark Assignment Agreement
Exhibit S-1 - Form of Foreign Affiliate Quota Pledge Agreement
Exhibit S-2 - Form of Xxxxxx Xxxxx Promise to Pledge Quotas
Exhibit S-3 - Form of Amendment to Foreign Affiliate Quota Pledge
Agreement
Exhibit S-4 - Form of AirLink Promise to Pledge Quotas
Exhibit T - Form of AirLink Security Deposit Agreement
Exhibit U - Form of Conditional Sale Agreement
Exhibit V-1 - Opinion of Brazilian Counsel to the Company
Exhibit V-2 - Opinion of Special U.S. Counsel to the Company
Exhibit W - Intentionally Omitted
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Exhibit X-1(a) - Form of Company Quota Voting Agreement
Exhibit X-1(b) - Form of Company Share Voting Agreement
Exhibit X-2 - Form of Foreign Affiliate Voting Agreement
Exhibit Y-1 - Form of Foreign Affiliate Assignment of Rights and
Obligations (Management Agreements)
Exhibit Y-2 - Form of Foreign Affiliate Assignment of Rights and
Obligations (Conditional Sale Agreements)
Schedule 1.01(a) - Material Leases
Schedule 1.01(b) - Foreign Affiliates
Schedule 1.0 - Restricted Assets
Schedule 7.01(a) - States of Incorporation and Qualification and Capitalization
and Ownership of Stock of the Company and each other Credit
Party
Schedule 7.01(b) - Jurisdictions
Schedule 7.03(a) - Governmental Approvals
Schedule 7.03(b) - Licenses
Schedule 7.04 - Violations of Governmental Rules by Operative Documents
Schedule 7.09 - Intellectual Property
Schedule 7.10 - Burdensome Documents; Transactions with Affiliates
Schedule 7.12 - Outstanding Judgments and Actions
Schedule 7.25 - The Company's and Foreign Affiliates' Bank Accounts
Schedule 8.04(d) - List of Line Items for Approved Business Plan (and
containing the "Use of Funds Schedule")
Schedule 8.07(a) - General Insurance Requirement
Schedule 8.07(b) - Political Risk Insurance Requirement
v
EQUIPMENT FINANCING AGREEMENT, dated as of October 31, 1997 (this
"AGREEMENT"), by and between XXXXX INTERNATIONAL (BRAZIL), LTD., a
corporation organized under the laws of the State of Virginia, with its
principal office at 0000 Xxxxxx Xxxxxx, Xxxxx 0000, Xxxxxxx, Xxxxxxxxxx
00000, X.X.X. (the "COMPANY") and MOTOROLA CREDIT CORPORATION, a corporation
duly organized under the laws of the State of Delaware, U.S.A., with its
principal office at 0000 Xxxx Xxxxxxxxx Xxxx, Xxxxxxxxxx, Xxxxxxxx
00000-0000, U.S.A. (the "CREDITOR").
W I T N E S S E T H:
WHEREAS, the Company has entered into the Integrated Digital Enhanced
Network Equipment Purchase Agreements dated as of March 21, 1997, by and
between Motorola, Inc. (the "VENDOR") and the Company (as amended, modified
and supplemented from time to time, the "iDEN EQUIPMENT AGREEMENTS"), along
with the Integrated Digital Enhanced Network Installation and Optimization
Agreements dated as of March 21, 1997, by and between the Company and the
Vendor (as amended, modified and supplemented from time to time, the "iDEN
SERVICE AGREEMENTS"; and together with the iDEN Equipment Agreements, the
"iDEN EQUIPMENT AND SERVICE AGREEMENTS");
WHEREAS, the Company has entered into (i) a Conditional Sale Agreement
dated as of the date hereof, by and between the Company and AirLink S.A., a
corporation organized under the laws of Brazil ("AIRLINK"), pursuant to which
the Company has agreed to extend credit to AirLink for the purchase of
certain iDEN and non-iDEN equipment in an aggregate amount not exceeding
$31,250,000 (as amended, modified and supplemented, the "CONDITIONAL SALE
AGREEMENT NO. 1"), and (ii) a Conditional Sale Agreement, dated as of the
date hereof, by and between the Company and AirLink pursuant to which the
Company has agreed to extend credit to AirLink for the purchase of certain
iDEN and non-iDEN equipment in an aggregate amount not exceeding $125,000,000
(as amended, modified and supplemented from time to time, the "CONDITIONAL
SALE AGREEMENT NO. 2");
WHEREAS, AirLink is a Subsidiary of the Company;
WHEREAS, the Company has requested that the Creditor provide Advances (as
hereinafter defined) in the principal amount not exceeding the least of (i)
$125,000,000, (ii) the aggregate purchase price (excluding import taxes
and/or duties) for all equipment and services purchased pursuant to the iDEN
Equipment and Service Agreements, (iii) the Maximum Total Advance Cap, and
(iv) the Maximum Total Foreign Advance Cap (as such terms are hereinafter
defined) (such lesser amount being the "COMMITMENT") solely to finance the
Company's purchase of iDEN (as hereinafter defined) equipment and services
pursuant to the iDEN Equipment and Service Agreements; and
WHEREAS, the Creditor is willing to make Advances to the Company upon the
terms and subject to the conditions hereinafter set forth.
NOW, THEREFORE, in consideration of the premises and in order to induce the
Creditor to make the Advances and the Creditor to enter into the agreements
referred to herein, the parties agree as follows:
SECTION 1. DEFINITIONS
SECTION 1.01 DEFINED TERMS.
In addition to the terms defined above, when used in this Agreement, the
following terms shall have the following meanings:
"ACCEPTABLE GUARANTOR" means a guarantor who is a shareholder of AirLink
and whose creditworthiness is equivalent to, or better than, the
creditworthiness of Nextel International as determined on the Closing Date or
on the date of the proposed assignment of the Nextel International Guaranty
pursuant to Section 15 thereof (whichever is better) in the Creditor's sole
determination. It being understood that in no event may Nextel International
make any assignment of its rights and obligations that would result in it
guaranteeing less than 70% of the Obligations.
"ADDITIONAL SYSTEM DOCUMENTS" means all contracts and agreements related
to the construction, maintenance, repair or operation of the System or the
Telecommunications Business entered into by the Company, Nextel International
or any Foreign Affiliate subsequent to the Closing Date (i) in replacement of
an existing System Document or (ii) which, if terminated, could reasonably be
expected to have a Material Adverse Effect or (iii) having an aggregate net
present value or cost in excess of $10,000,000.
"ADVANCE" has the meaning ascribed to such term in subsection 2.01(a)
hereof.
"AFFILIATE" means with respect to any Person, any other Person (a) which
directly or indirectly through one or more intermediaries controls, or is
controlled by, or is under common control with, such first Person, (b) which
beneficially owns or holds 5% or more of any class of the Voting Stock of
such first Person, or (c) whereby 5% or more of the Voting Stock (or in the
case of a Person which is not a corporation, 5% or more of the equity
interest) of such other Person is beneficially owned or held by such first
Person or by a Subsidiary of such first Person. The term "control" means the
possession, directly or indirectly, of the power to direct or cause the
direction of the management and policies of a Person, whether through the
ownership of Voting Stock, by contract or otherwise.
"AFFILIATED COMPANIES" means Nextel, Nextel International, Infocom, the
Company, the Foreign Affiliates, any other Subsidiary or Affiliate of Nextel
or any combination thereof.
"AGREEMENT" means this Equipment Financing Agreement, dated as of the
date hereof, by and between the Company and the Creditor.
2
"AIG" means American International Group.
"AIG POLICY" means [_____________________________].
"AIRFONE" means Air Fone Comercio e Servicos de Radiofonia Movel Ltda., a
Brazilian limited liability quota company.
"AIRFONE HOLDINGS" means Air Fone Holdings, Inc.
"AIRFONE PARTICIPACAO" means Air Fone Participacao e Empreendimentos S/C
Ltda.
"AIRLINK" has the meaning ascribed to such term in the second preamble
hereof.
"AIRLINK ACCOUNTS" means the AirLink Receipt Account and the AirLink Debt
Service Account.
"AIRLINK DEBT SERVICE ACCOUNT" has the meaning ascribed to such term in
Section 1 of the AirLink Security Deposit Agreement.
"AIRLINK INTERCOMPANY SERVICES AGREEMENT" has the meaning ascribed to such
term in Section 7.10(d) hereof.
"AIRLINK LEASE ASSIGNMENT" has the meaning ascribed to such term in
subsection 6.01(f) hereof.
"AIRLINK PROMISE TO PLEDGE QUOTAS" has the meaning ascribed to such term in
subsection 6.01(g) hereof.
"AIRLINK RECEIPT ACCOUNT" has the meaning ascribed to such term in Section
1 of the AirLink Security Deposit Agreement.
"AIRLINK SECURITY DEPOSIT AGREEMENT" has the meaning ascribed to such term
in subsection 6.01(f) hereof.
"AIRLINK SHAREHOLDERS AGREEMENT" means the AirLink S.A. Shareholders
Agreement, dated as of September 26, 1997, by and among the Company, Motorola do
Brasil and AirLink S.A.
"APPLICABLE MARGIN" means (i) with respect to any LIBOR Advance 4.63% per
annum, and (ii) with respect to any Prime Advance 2.5% per annum.
3
"APPROVED BUSINESS PLAN" means the quarterly business plan of the Company
for a nationwide iDEN system in Brazil dated September 24, 1997 (and
delivered to the Creditor prior to the Closing Date) as may be modified
pursuant to Section 8.04 hereof.
"ARM'S-LENGTH AFFILIATE" has the meaning ascribed to such term in Section
9.11 hereof.
"ART CONSULT" means Art Consult Global International S/A.
"AUTHORIZED OFFICER" means (a) with respect to any Person that is a
corporation, the President, Vice President or Treasurer of such Person, (b)
with respect to any Person that is a Partnership, the President, Vice
President or Treasurer of a general partner of such Person, in each case
whose names appear on a certificate of incumbency of such Person delivered
concurrently with the execution of this Agreement, or (c) with respect to
Brazilian limited liability companies, the delegate manager or managing
quotaholder.
"AVAILABLE COMMITMENT" means an amount equal to (x) the Commitment MINUS
(y) the aggregate principal amount of all Advances made to the date of
determination, including without limitation Advances that have been prepaid
but excluding those Advances which have been prepaid in accordance with
subsections 2.05(a)(ii) and 2.05(a)(iii) hereof and are available to be
reborrowed pursuant to Section 2.05(a)(v) hereof.
"AVAILABILITY PERIOD" means the period beginning with the Closing Date
and ending on the earlier of (i) Commitment Termination Date or (ii) the date
on which the obligation of the Creditor to make Advances hereunder terminates
in accordance with the terms of this Agreement.
"BUSINESS DAY" means (i) any day other than Saturday, Sunday or any other
day on which commercial banks in New York City or Sao Paulo, are authorized
or required under the laws of the State of New York or Brazil, respectively,
or pursuant to other government action to close, and (ii) with respect to all
notices and determinations in connection with any payment of principal and
interest on LIBOR Advances, any day which satisfies the conditions set forth
in clause (i) above and which is also a day for trading by and between banks
for U.S. dollar deposits in the London interbank market.
"XXXXXX XXXXX" means Xxxxxx Xxxxx International Corporation.
"XXXXXX XXXXX PROMISE TO PLEDGE QUOTAS" has the meaning ascribed to such
term in subsection 6.01(f)(i) hereof.
"CAPITAL LEASE OBLIGATIONS" means the obligations of a Person and its
subsidiaries (determined on a consolidated basis (without duplication) in
accordance with GAAP) to pay rent or other amounts under any leases for real
or personal property which obligations are required to be classified and
accounted for as capital leases in accordance with GAAP.
4
"CLASS B REDEMPTION" has the meaning ascribed to such term in subsection
9.06(b) hereof.
"CLOSING DATE" means October 31, 1997.
----
"CODE" means the Internal Revenue Code of 1986, as it may be amended from
time to time, and the regulations promulgated thereunder.
"COLLATERAL" means all real and personal property, whether owned or
leased (including, without limitation, the System Documents (excluding the
Excluded Leases), the Licenses and Governmental Approvals) which are subject
to the security interests or Lien granted by any of the Security Documents in
each case except to the extent they are Restricted Assets or Immaterial
Assets.
"COMMITMENT" has the meaning ascribed to such term in the fourth preamble
hereof.
"COMMITMENT TERMINATION DATE" means the date twenty-four (24) months from
the Closing Date.
"COMPANY" means XxXxx International (Brazil), Ltd., a corporation
organized under the laws of the State of Virginia.
"COMPANY PROMISE TO PLEDGE QUOTAS" has the meaning ascribed to such term
in subsection 6.01(a)(i)(B) hereof.
"COMPANY QUOTA PLEDGE AGREEMENT" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
"COMPANY QUOTA VOTING AGREEMENT" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
"COMPANY SECURITY AGREEMENT" has the meaning ascribed to such term in
subsection 6.01(a)(i)(A) hereof.
"COMPANY SECURITY DEPOSIT AGREEMENT" has the meaning ascribed to such
term in subsection 6.01(a)(i)(A) hereof.
"COMPANY SHARE PLEDGE AGREEMENTS" has the meaning ascribed to such term
in subsection 6.01(a)(i)(B) hereof.
"COMPANY SHARE VOTING AGREEMENT" has the meaning ascribed to such term in
subsection 6.01(a)(i)(B) hereof.
5
"CONDITIONAL SALE AGREEMENT NO. 1" has the meaning ascribed to such term
in the second preamble hereof.
"CONDITIONAL SALE AGREEMENT NO. 2" has the meaning ascribed to such term
in the second preamble hereof.
"CONDITIONAL SALE AGREEMENTS" means collectively the Conditional Sale
Agreement No. 1 and the Conditional Sale Agreement No. 2.
"CONDITIONAL SALE NOTES" means collectively (i) (a) the iDEN promissory
note dated the Initial Funding Date issued by AirLink in favor of the Company
in connection with the Conditional Sale Agreement No. 1 in the principal
amount of $25,000,000 and (b) the non-iDEN promissory note dated the Initial
Funding Date issued by AirLink in favor of the Company in connection with the
Conditional Sale Agreement No. 1 in the principal amount of $6,125,000, and
(ii) (a) the iDEN promissory note dated the Initial Funding Date issued by
AirLink in favor of the Company in connection with the Conditional Sale
Agreement No. 2 in the principal amount of $100,000,000 and (b) the non-iDEN
promissory note dated the Initial Funding Date issued by AirLink in favor of
the Company in connection with the Conditional Sale Agreement No. 2 in the
principal amount of $25,000,000.
"CONSENTS TO ASSIGNMENTS" means a collective reference to each consent
executed and delivered by a System Party (other than an Option Company) in
connection with each System Document other than the Excluded Leases.
"CONSOLIDATED ENTITY" means the Foreign Affiliate holding all of the
Licenses after the consummation of the Proposed Consolidation which entity
(x) has no creditors except to the extent permitted by the definition of
Permitted Indebtedness, and (y) the Company shall directly own (on a fully
diluted basis) more than 50% of the Voting Stock, more than 50% of the
economic interests and otherwise Controls.
"CONSOLIDATED FIXED CHARGES" means, as to any Person and for any period,
without duplication, the sum of (a) (i) the total interest expense for such
Person and its Subsidiaries on a consolidated basis for such period
(including, without limitation, all interest expense on Capital Lease
Obligations), (ii) the scheduled principal amount of all amortization
payments on all Indebtedness for borrowed money of such Person and its
Subsidiaries on a consolidated basis for such period, (iii) all payments made
under capitalized leases, and (iv) all payments made under Hedge Agreements,
minus (b) all payments received under Hedge Agreements.
"CONTROL" means at any time, the possession (on a fully diluted basis),
directly or indirectly, of the power to direct or cause the direction of the
management and policies of a Person, whether through the ownership of Voting
Stock, by contract or otherwise.
6
"CONTROLLED GROUP" means all members of a controlled group of
corporations and all trades or businesses (whether or not incorporated) under
common control which as of the relevant date, together with the Company, are
treated as a single employer under Section 414(b) or 414(c) of the Code or
Section 4001(b)(1) of ERISA.
"COULD REASONABLY BE EXPECTED" means as would be determined by a prudent
Person, familiar with the general substance at issue, in like circumstances
with the Person making the decision.
"CREDIT DOCUMENTS" means, individually and collectively, this Agreement,
the Financing Note, the Security Documents, the Foreign Affiliate Guaranties,
the Nextel Side Letter and the Stockholder Guaranties and each other document
entered into pursuant thereto.
"CREDITOR" means Motorola Credit Corporation, a corporation organized
under the laws of the State of Delaware, United States of America.
"CREDIT PARTY" means the Company, any Foreign Affiliate, any Stockholder
Guarantor, Telcom and any of the Telcom Entities.
"DEFAULT" means any event, occurrence, factual or legal condition which,
if continued uncured or unchanged would, with the passage of time or the
giving of notice or both, become or constitute an Event of Default.
"DOLLARS" and the sign "$" mean the lawful money of the United States of
America.
"DRAWDOWN CERTIFICATE" means a certificate of the Company in the form of
Exhibit C hereto.
"DRAWDOWN DATE" has the meaning ascribed to such term in subsection
2.02(a) hereof.
"EBITDA" means, as to any Person and for any period, the net income of
such Person and its Subsidiaries as measured in accordance with GAAP on a
consolidated basis for such period, plus interest expense, minus interest
income, plus (or minus, in the case of income tax benefits) provision for
taxes, minus (or plus, in the case of a loss) extraordinary gains or losses,
to the extent not covered by U.S. GAAP, minus (or plus, in the case of a
loss) financial gains or losses, or gains or losses from sales of assets
(other than sales of inventory in the ordinary course of their respective
businesses), plus amortization and depreciation charges plus (or minus, in
the case of losses) minority interest in the net income or losses of
consolidated Subsidiaries, minus (or plus, in the case of a loss) income or
losses from equity method investments, minus (or plus, in the case of a loss)
any inflationary adjustments, to the extent not covered by U.S. GAAP,
including (i) monetary correction gain or loss, (ii) foreign exchange gain or
loss, and (iii) inflationary income statement adjustments to revenues or
expenses.
7
"ENVIRONMENTAL LAWS" means any and all governmental statutes, laws,
regulations, ordinances, rules, judgments, orders, decrees, permits,
concessions, grants, franchises, licenses, guidelines, interpretations,
policies, agreements or other restrictions or requirements (herein, "laws and
regulations") relating to Materials of Environmental Concern or protection of
human or animal health or the environment (including, without limitation,
ambient air, indoor air, surface water, ground water, land surface or
sub-surface strata), including, without limitation, laws and regulations
relating to emissions, discharges, health or safety, noise abatement,
releases or threatened releases of Materials of Environmental Concern or
otherwise relating to the manufacture, processing, distribution, use,
treatment, storage, disposal, transport, recycling, reporting or handling of
Materials of Environmental Concern, and all such laws and regulations that
may be enacted in the future.
"ENVIRONMENTAL MATTERS" has the meaning ascribed to such term in
subsection 7.08(d) hereof.
"EQUITY INVESTOR" has the meaning ascribed to such term in subsection
8.09(a) hereof.
"ERISA" means the Employee Retirement Income Security Act of 1974, as it
may be amended from time to time, and the regulations promulgated thereunder.
"EVENT OF ABANDONMENT" means the abandonment of the System or the
Telecommunications Business or cessation of the operation of the System or
the Telecommunications Business which reasonably indicates to the Creditor
that the Company intends to abandon the System or the Telecommunications
Business.
"EVENT OF DEFAULT" means any of the events specified in Section 11.01
hereof.
"EXCESS CASH FLOW" means, for any period, an amount equal to (i) the Free
Cash Flow (excluding actual cash equity contributions) of the Company, less
(ii) the sum of aggregate Consolidated Fixed Charges, taxes accrued and
voluntary prepayments made hereunder, during such period.
"EXCLUDED LEASES" means those Leases entered into prior to the date
hereof (other than those Leases described on Schedule 1.01(a) hereto), and
any other Leases which Nextel International, the Company or any Foreign
Affiliate shall not be permitted to assign to the Creditor, notwithstanding
their exercise of good faith and commercially reasonable efforts in
accordance with the provisions of Section 8.13 hereof.
"FINANCING NOTE" has the meaning ascribed to such term in Section 2.03
hereof.
"FIXED CHARGE COVERAGE RATIO" means, as at any date, the ratio of (i)
Free Cash Flow to (ii) Consolidated Fixed Charges.
8
"FOREIGN AFFILIATE" means, with respect to the Company, those Affiliates
listed on Schedule 1.01(b) hereto, each entity created or acquired pursuant
to Section 9.05 or 9.12 hereof, and any other Affiliate of the Company that
executes a Credit Document.
"FOREIGN AFFILIATE ASSIGNMENT OF RIGHTS AND OBLIGATIONS" has the meaning
ascribed to such term in subsection 6.01(d)(i) hereof.
"FOREIGN AFFILIATE GUARANTIES" has the meaning ascribed to such term in
Section 5.02 hereof.
"FOREIGN AFFILIATE PLEDGE AGREEMENTS" has the meaning ascribed to such
term in subsection 6.01(f)(i) hereof.
"FOREIGN AFFILIATE SECURITY AGREEMENTS" has the meaning ascribed to such
term in subsection 6.01(d)(i) hereof.
"FOREIGN AFFILIATE TRADEMARK ASSIGNMENT AGREEMENT" has the meaning
ascribed to such term in subsection 6.01(d)(i) hereof.
"FOREIGN AFFILIATE VOTING AGREEMENT" has the meaning ascribed to such
term in subsection 6.01(f)(i) hereof.
"FOREIGN PROJECTS" means the iDEN systems operated by Nextel
International or its Affiliates outside the United States.
"FOREIGN RESIDENT ACCOUNT" has the meaning ascribed to such term in
Section 8.22 hereof.
"FREE CASH FLOW" means, for any period, EBITDA for such period MINUS
actual capital expenditures (excluding those financed with Permitted
Indebtedness) for such period PLUS actual cash equity contributions to the
Company, AirLink or the other Foreign Affiliates for such period.
"GAAP" means generally accepted accounting principles used, from time to
time, in the United States of America.
"GOVERNMENTAL APPROVAL" means any authorization, consent, approval,
license, franchise, concession, lease, ruling, permit, certification,
exemption, filing or registration by or with any Governmental Authority or
legal or administrative body reasonably desirable, or necessary, for the
design, location, construction, completion, ownership, operation, repair or
maintenance of the System or the Telecommunications Business, authority to
conduct business, the execution and delivery of the Credit Documents, the
making of Advances or the creation and perfection of the Liens contemplated
by the Security Documents.
9
"GOVERNMENTAL AUTHORITY" means any nation or government, any state or
other political subdivision thereof, and any entity exercising executive,
legislative, judicial, regulatory or administrative authority or functions of
or pertaining to government.
"GOVERNMENTAL RULE" means any statute, law, regulation, ordinance, rule,
judgment, order, writ, decree, directive, guideline, policy or requirement,
or any similar form of decision of or determination by, or any interpretation
or administration of any of the foregoing by, any Governmental Authority
(including, without limitation, any Environmental Law), whether now or
hereafter in effect.
"HEDGE AGREEMENT" means an interest rate swap, cap, floor or collar
agreement, any spot or forward contracts, interest rate future or option
contracts, currency swap agreements, commodities future contracts, currency
future or option contracts, as the same shall be modified and supplemented
and in effect from time to time.
"iDEN" means the Integrated Digital Enhanced Network created by the
Motorola Entities.
"iDEN EQUIPMENT AGREEMENTS" has the meaning ascribed to such term in the
first preamble hereof.
"iDEN EQUIPMENT AND SERVICE AGREEMENTS" has the meaning ascribed to such
term in the first preamble hereof.
"iDEN SERVICE AGREEMENTS" has the meaning ascribed to such term in the
first preamble hereof.
"IMMATERIAL ASSETS" means motor vehicles and immaterial assets, in each
case (i) having a fair market value of not more than $50,000 and an aggregate
value at any time of not more than 1% of the fair market value of all assets
owned by the Company and the Foreign Affiliates, and (ii) that are not
essential for the operation of the Company or any Foreign Affiliate or the
operation of the System or the Telecommunications Business.
"INDEBTEDNESS" means, with respect to any Person, (a) all indebtedness of
such Person for borrowed money (whether by loan or the issuance and sale of
debt securities), (b) all obligations of such Person to pay the deferred and
unpaid purchase price of property or services excluding current trade
payables incurred in the ordinary course of business of such Person which are
due less than three (3) months after the date of invoice, (c) all obligations
of such Person evidenced by bonds, debentures, notes or other similar
instruments, (d) the obligations of such Person under direct or indirect
guaranties in respect of, and obligations (contingent or otherwise) to
purchase or otherwise acquire, or otherwise to assure a creditor against loss
in respect of, indebtedness or obligations of others of the types referred to
in clauses (a) and (c) above, (e) all obligations of such Person in respect
of letters of credit or similar instruments
10
issued or accepted by banks and other financial institutions for the account
of such Person, (including reimbursement obligations with respect thereto)
but excluding (i) letters of credit including trade letters of credit
securing obligations (other than obligations described in (a), (b), (c) and
(d) above and (f) and (g) below) entered into in the ordinary course of
business of such Person to the extent such letters of credit are not drawn
upon or, if drawn upon, to the extent such drawing is reimbursed no later
than the third Business Day following receipt by such Person of a demand for
reimbursement and (ii) letters of credit secured by cash which is deposited
in a segregated account held by a non-affiliate of such Person, (f) all
indebtedness of others secured by a Lien on any asset of such Person whether
or not such indebtedness is assumed by such Person, PROVIDED, THAT, in the
case where such Person has no obligation with respect to the Indebtedness of
such other Person other than such Lien, the amount of Indebtedness shall be
the lesser of (i) the fair market value of such asset at such date of
determination and (ii) the amount of such Indebtedness, (g) all Capital Lease
Obligations, and (h) to the extent not otherwise included in this definition,
all obligations in respect of Hedge Agreements.
"INFOCOM" means Infocom Communications Network, Inc., a company
incorporated in the Philippines.
"INFORMATION" has the meaning ascribed to such term in Section 12.12
hereof.
"INITIAL FUNDING DATE" means the date upon which each of the conditions
precedent set forth in Section 10.01 and 10.02 have been satisfied and the
initial Advance is made.
"INTELLECTUAL PROPERTY" has the meaning ascribed to such term in Section
7.09 hereof.
"INTEREST PAYMENT DATES" means (i) semi-annually on the Semi Annual Dates,
and (ii) at any time, in the case of any Advance, upon the payment or prepayment
thereof or the conversion thereof into an Advance of another type pursuant to
subsections 2.02(a) and 2.06(b) hereof (but only on the principal so prepaid,
paid or converted).
"INTEREST PERIOD" means with respect to each LIBOR Advance, each period
commencing in the date such LIBOR Advance is made or converted from a Prime
Advance pursuant to subsection 2.02(a) hereof or the last day of the preceding
Interest Period with respect to such LIBOR Advance, and ending, except as
otherwise provided in Section 2.02 hereof, on the same day in the sixth calendar
month thereafter. Notwithstanding the foregoing, (i) the final Interest Period
shall end on the Maturity Date, and (ii) each Interest Period that would
otherwise end on a day that is not a Business Day shall end on the next
succeeding Business Day.
"INVOICE" has the meaning ascribed to such term in subsection 2.02(a)
hereof.
"IRS" means the Internal Revenue Service.
11
"KNOWLEDGE" means (a) as it applies to the Company or Nextel
International, the actual knowledge of a Vice President or more senior
officer of the Company or Nextel International, respectively, or any other
officer of the Company or Nextel International, respectively, having
responsibility for the transactions contemplated by the Operative Documents,
and (b) as it applies to AirLink, the actual knowledge of a director or other
representative having management authority; PROVIDED, that each of the
Company, Nextel International and AirLink shall be deemed to have "knowledge"
of any matter as to which it has received written notice from any
Governmental Authority, any party to any System Document or any other Credit
Party.
"LEASE ASSIGNMENT AGREEMENTS" means collectively the Airlink Lease
Assignment Agreement and each other Lease Assignment Agreement executed and
delivered by a Credit Party in the form of Exhibit M-2 hereto.
"LEASES" mean the various lease agreements executed by the Company or any
of the other Credit Parties in connection with the lease of such interests of
real and personal property as shall be necessary to install, operate and
maintain the System or the Telecommunications Business.
"LIBOR ADVANCE" means Advances the interest on which is determined on the
basis of rates referred to in the definition of LIBOR Base Rate.
"LIBOR BASE RATE" means, during an Interest Period for LIBOR Advances,
the rate per annum equal to the rate determined by reference to the LIBOR
Page on the Xxxxxx Monitor Money Rates Services, or any successor thereto as
of 11:00 a.m., London, England time two (2) Business Days prior to the
beginning of such Interest Period, for delivery on the first day of such
Interest Period for the number of days comprised therein and in an amount
comparable to the amount of the LIBOR Advances to be outstanding during such
Interest period. If quotes for the foregoing rates are not available on the
Xxxxxx Monitor Money Rates Services or any successor thereto, the "LIBOR Base
Rate" shall mean, during an Interest Period for LIBOR Advances, the rate of
interest per annum determined by the Creditor to be the weighted average
(rounded upwards, if necessary, to the nearest whole multiple of 1/100 of 1%
per annum, if such weighted average is not such a multiple) of the rates per
annum at which deposits in Dollars are offered to major money center banks in
the London interbank market at 11:00 a.m. London time two (2) Business Days
prior to the first day of such Interest Period, in the approximate amount
equal to the principal amount of the LIBOR Advance to be made by the Creditor
for such Interest Period and for a period equal to such Interest Period.
"LIBOR RATE" means for any Interest Period therefor, the LIBOR Base Rate
for such Advance for such Interest Period; divided by 1 minus the Reserve
Requirement for such Advance for such Interest Period.
"LICENSES" means collectively all those licenses and concessions
permitting the Company and the Foreign Affiliates to conduct a wide range of
mobile radio services, including but not limited to radio dispatch service,
paging, telephone interconnect services, and other mobile
12
communications, and personal communication services together with any
amendments or changes to each such license that expand the authority of the
Company and the Foreign Affiliates thereunder.
"LIEN" means, with respect to any Person, any security interest, lien,
pledge, mortgage, deed of this charge or encumbrance (including any agreement
to give any of the foregoing), conditional sale agreement, title retention
agreement, finance lease or trust receipt or a consignment or bailment for
security purposes, or other security arrangement or any other arrangement on
or with respect to any asset or revenue of such Person.
"MAJOR MARKET AREA" means each of the following cities in Brazil: Belo
Horizonte, Sao Paulo and Rio de Janeiro.
"MAJORITY-OWNED FOREIGN AFFILIATE" means each and any of AirLink, Via
Radio, Via Radio-1, AirFone Participacao, AirFone Holdings, AirFone, Radio
Telecomunicacoes do Brasil Ltda., ATG Telecomunicacoes e Comercio Ltda.,
Comercial Telecar Ltda., S.O.W. Comercio e Servicos de Telefonia Movel Ltda.,
Telemovel Servicos Ltda., Comercial Teleservie Ltda., Car-Tel Telefonia Movel
Ltda., Xxxxxx Xxxxx and Art Consult and any other Foreign Affiliate in which
Nextel International or the Company directly or indirectly through one or
more intermediaries beneficially owns more than 50.0% of the voting stock or
equity interest, as the case may be.
"MANAGEMENT AGREEMENTS" means collectively the Management Agreements
referred to on Schedule 7.10 hereto.
"MATERIAL ADVERSE EFFECT" means, generally with respect to any Person,
event or occurrence, a material adverse effect on (i) such Person's business,
financial condition, assets, properties or operations (including the
construction, completion and operation of the System in the case of the
Company), (ii) such Person's ability to perform its obligations under the
Operative Documents to which such Person is a party, (iii) the security
interests granted by such Person under the Security Documents, (iv) the
System or (v) such Person's Licenses or Governmental Approvals.
(a) With respect to any of the Company, Nextel International and any
of the Foreign Affiliates, Material Adverse Effect shall mean a material
adverse effect set forth in clauses (i) through (v) above. When the term
Material Adverse Effect is applied to the Company and the Foreign
Affiliates, it shall be deemed to apply to the Company and the Foreign
Affiliates taken as a whole (or, after consummation of the Proposed
Consolidation in accordance with this Agreement, the Consolidated Entity,
the Company and any surviving Foreign Affiliates taken as a whole).
(b) With respect to any Stockholder Guarantor other than Nextel
International, Material Adverse Effect shall mean a material adverse effect
set forth in clauses (i), (ii)
13
and (iii) above, unless, with respect to clause (ii) above in respect
of a failure to perform under its Stockholder Guaranty (the
"DEFAULTING STOCKHOLDER GUARANTOR"), (x) within five (5) Business Days
after notice of such Material Adverse Effect, Nextel International or
any other Stockholder Guarantor shall have assumed the liability of such
Defaulting Stockholder Guarantor under its Stockholder Guaranty, and (y)
there shall be no adverse effect on the stock or quotas pledged by such
Defaulting Stockholder Guarantor.
"MATERIALS OF ENVIRONMENTAL CONCERN" means chemicals, pollutants,
polychlorinated biphenyls, contaminants, wastes, toxic or hazardous
substances, asbestos, petroleum and petroleum products.
"MATURITY DATE" means December 31, 2003, provided, if such date is not a
Business Day, then the Maturity Date shall be the next succeeding Business
Day.
"MAXIMUM TOTAL ADVANCE CAP" means $650,000,000 minus the Outstanding
Advance Amount.
"MAXIMUM TOTAL ADVANCE EXCESS" means the amount, if any, by which the
Outstanding Advance Amount exceeds $650,000,000.
"MAXIMUM TOTAL FOREIGN ADVANCE CAP" means $400,000,000 minus the
Outstanding Foreign Advance Amount.
"MAXIMUM TOTAL FOREIGN ADVANCE EXCESS" means the amount, if any, by which
the Outstanding Foreign Advance Amount exceeds $400,000,000.
"MCS" means MCS Radio Telefonia Ltda., a Brazilian limited liability
company.
"MINISTRY OF COMMUNICATIONS" means the Brazilian Ministry of
Communications and its successors.
"MOTOROLA DO BRASIL" means Motorola do Brasil Ltda., a Brazilian limited
liability company.
"MOTOROLA DO BRASIL GUARANTY" has the meaning ascribed to such term in
Section 5.01 hereof.
"MOTOROLA ENTITY" means Motorola, Inc., a corporation duly organized and
validly existing under the laws of the State of Delaware, United States of
America, and each of its Affiliates and Subsidiaries and their successors and
assigns.
"MSO SITE" means the site in respect of the Lease for the Mobile
Switching Office described on Schedule 1.01(a) hereof.
14
"NET WORTH" means, with respect to any Person, the net worth of such
Person as determined in accordance with GAAP.
"NEXTEL" means Nextel Communications, Inc., a Delaware corporation.
"NEXTEL INTERNATIONAL" means Nextel International, Inc., a Washington
corporation.
"NEXTEL INTERNATIONAL GUARANTY" has the meaning ascribed to such term in
Section 5.01 hereof.
"NEXTEL SIDE LETTER" means the letter dated the Initial Funding Date by
AirLink and Nextel International addressed to the Creditor in form and
substance satisfactory to the Creditor in its sole discretion.
"OBLIGATIONS" means collectively, all of the Indebtedness, liabilities
and obligations of the Company to the Creditor, whether now existing or
hereafter arising, whether or not currently contemplated, including without
limitation, those arising under the Credit Documents.
"OPERATION AND MAINTENANCE COSTS" means, for any period, the sum of the
following expenses incurred during such period (without duplication),
calculated in accordance with GAAP: (a) ordinary costs incurred in connection
with the ongoing operation and maintenance of the System in accordance with
the Approved Business Plan, (b) reasonable expenses of administering and
operating the System and of maintaining it in good repair and operating
condition, (c) insurance costs, (d) reasonable costs and fees incurred in
connection with obtaining and maintaining in effect the Governmental
Approvals and Licenses, (e) legal, accounting, marketing and other
professional fees incurred in connection with any of the foregoing items, and
(f) scheduled major maintenance; PROVIDED that such expenses do not include
depreciation or any items properly chargeable by GAAP to fixed capital
accounts or any taxes.
"OPERATIVE DOCUMENTS" means, collectively, the Credit Documents and the
System Documents.
"OPIC" means Overseas Private Investment Corporation, an agency of the
United States government.
"OPIC POLICY" means the OPIC Contract of Insurance No. E811.
"OPTION AGREEMENTS" mean collectively those Option Agreements referred to
on Schedule 7.10 hereto.
"OPTION COMPANIES" means LMP Consultoria e Representacoes Ltda.,
Telecomunicacoes Brastel S/C Ltda., Telemobile Telecomunicacoes Ltda.,
Promobile Telecomunicacoes Ltda., Trunking do Brasil Servicos de
Telecomunicacoes Ltda., Trunkline Telecomunicacoes e Servicos
15
Ltda., Master-Tec Telecomunicacoes Industria e Comercio de Produtos
Eletronicos Ltda. and MCS.
"OPTIONS" means the options granted to the Company, AirLink and Xxxxxx
Xxxxx, respectively, in respect of the quotas of each of the Option Companies
pursuant to the Option Agreements.
"OUTSTANDING ADVANCE AMOUNT" means as at any date all amounts outstanding
on such date (calculated in Dollars) advanced (including any Advance made on
such date) to all Affiliated Companies by Motorola Credit Corporation or any
other Motorola Entity (or any other Person to the extent the advance made by
such Person is guaranteed by Motorola Credit Corporation or any other
Motorola Entity) or any such other Person pursuant to this Agreement or the
Vendor Financing Agreement or any other agreement in effect between any
Motorola Entity (or any such other Person) and any of the Affiliated
Companies, in each case that relates to iDEN, but excluding amounts advanced
by any Motorola Entity to any Affiliated Company which advances have been
sold to a non-Motorola Entity by such Motorola Entity without recourse to the
seller.
"OUTSTANDING FOREIGN ADVANCE AMOUNT" means at any date all amounts
outstanding on such date (calculated in Dollars) advanced (including any
Advance made on such date) to all Affiliated Companies by Motorola Credit
Corporation or any other Motorola Entity (or any other Person to the extent
the advance made by such Person is guaranteed by, or is otherwise made with
recourse to Motorola Credit Corporation or any other Motorola Entity),
pursuant to this Agreement or the Vendor Financing Agreement or any other
agreement in effect between any Motorola Entity (or any such other Person)
and any of the Affiliated Companies, in each case that relates to iDEN
equipment and services purchased for or in connection with any Foreign
Project, but excluding amounts advanced by any Motorola Entity to any
Affiliated Company which advances have been sold to a non-Motorola Entity by
such Motorola Entity without recourse to the seller.
"PAYMENT DATE" means each Semi Annual Date in each year commencing with
the June 30, 2000 Semi Annual Date.
"PBGC" means the Pension Benefit Guaranty Corporation or its successor.
"PERMITTED INDEBTEDNESS" means, collectively, (a) the Obligations, (b)
trade accounts payable and other similar Indebtedness of the Company and the
Foreign Affiliates incurred in the ordinary course of business (including,
without limitation, handsets or mobile units purchased in the ordinary course
of business) and as permitted in this Agreement, (c) obligations under
long-term real property leases of the Company and the Foreign Affiliates in
respect of the cell sites, switch sites, retail space and office space
incurred in the ordinary course of business, (d) short-term lease obligations
of the Company and the Foreign Affiliates in an amount per annum not
exceeding $250,000 in the aggregate, (e) Indebtedness of the Company and the
Foreign
16
Affiliates to be used for working capital purposes and not exceeding
$7,000,000 in the aggregate which may be secured by the Collateral on a pari
passu basis on terms and conditions reasonably satisfactory to the Creditor,
(f) Indebtedness of the Company and the Foreign Affiliates not exceeding
$50,000,000 in the aggregate which may be secured by the Collateral on a pari
passu basis on terms and conditions reasonably satisfactory to the Creditor,
(g) Indebtedness of AirLink to Motorola do Brasil relating to loans made by
minority shareholders in AirLink during the period commencing September 26,
1997 and ending on April 30, 1999 pursuant to subsection 5(e) of the AirLink
Shareholders Agreement; PROVIDED, THAT such Indebtedness is not repaid until
Telcom makes a capital contribution to the Company in an amount equal to such
Indebtedness, and (h) Indebtedness of the Company to Nextel International
incurred in order to fund prepayment obligations as described in subsection
2.05(e) hereof.
"PERMITTED INVESTMENTS" means:
(a) debt obligations maturing within twelve months of the
time of acquisition thereof which from time to time are accorded a
rating of AA- or better by Standard & Poor's Corporation (or an
equivalent rating by another recognized credit rating agency of
similar standing if such corporation is not then in the business of
rating long term debt obligations);
(b) commercial paper with a maturity of 270 days or less
which from time to time is accorded a rating of A-1 or better by
Standard & Poor's Corporation (or an equivalent rating by another
recognized credit rating agency of similar standing if such
corporation is not then in the business of rating commercial paper);
(c) certificates of deposit maturing within twelve months
of the time of acquisition thereof issued by commercial banks that are
accorded a rating by an internationally recognized rating service then
in the business of rating commercial banks which is in the first
quartile of the rating categories used by such service;
(d) obligations maturing within twelve months of the time of
acquisition thereof of any Governmental Authority which obligations from
time to time are accorded a rating of BBB or better by Standard & Poor's
Corporation (or an equivalent rating by another recognized credit rating
agency of similar standing if such corporation is not then in the business
of rating governmental obligations); and
(e) demand deposits, certificates of deposit, bankers acceptance and
time deposits (having a term of less than one year) of United States or
Brazil banks having total assets in excess of $1,000,000,000 (or such
amount of local currency as is
17
equivalent in $1,000,000,000 at all times using the rate of exchange in
effect from time to time on legal and customarily used foreign exchange
markets in Brazil).
"PERMITTED LIENS" means, as of any particular time, (a) with respect to
Collateral located in the United States, Liens for taxes, assessments or
governmental charges not then delinquent or which the Company may, pursuant
to the provisions of Section 8.01 hereof, permit to remain unpaid, (b) Liens
created pursuant to the Security Documents, (c) with respect to Collateral
located in the United States, any mechanic's, worker's, repairer's,
materialmen's, supplier's, vendor's or like Liens securing obligations
arising in the ordinary course of business that (x) are not mature and not
overdue, or (y) are being contested in good faith and (1) as to which
adequate reserves have been established on the books of the Company in
accordance with GAAP or (2) that do not materially impair the value or
marketability of the security granted to the Creditor pursuant to the
Security Documents and could not result in an aggregate liability in excess
of $1,000,000, (d) with respect to Collateral located in the United States,
all utility, access and other similar easements, rights-of-way and
restrictions granted in the ordinary course of business, (e) with respect to
Collateral located in the United States, pledges or deposits by the Company
under workers' compensation laws, unemployment insurance laws, social
security or pension obligations or similar legislation, in respect of which
adequate reserves shall have been established, or good faith deposits in
connection with bids, tenders, contracts (other than for the payment of
Indebtedness of the Company) or leases to which the Company is permitted
hereunder to be a party, or deposits to secure public or statutory
obligations of the Company, or deposits of cash or bonds to secure surety or
appeal bonds which the Company is obligated to provide in accordance with
activities permitted of it hereunder, or deposits as security for contested
taxes or import duties or for the payment of rent, (f) Liens upon tangible
personal property (which was acquired after the date hereof, and the cost of
which, individually or in the aggregate, does not exceed $100,000) by the
Company or any Foreign Affiliate, each of which Liens was created solely to
secure Indebtedness representing, or incurred to finance, refinance or
refund, the cost of such property (PROVIDED that no such Lien shall extend to
cover any property of the Company other than the property so acquired), and
(g) with respect to Collateral located in the United States, rights reserved
to or vested in any Governmental Authority as of the date hereof to condemn,
appropriate, control or regulate the System or any portion thereof. A
contest referred to in this definition shall be permitted only if the
execution or enforcement of the Lien being contested shall have been stayed
or is stayed as a result thereof and such contest could not reasonably be
expected to (i) have a Material Adverse Effect, or (ii) create or materially
increase the risk of imposition of any material penalties or liabilities,
whether civil or criminal, upon the Creditor.
"PERSON" means an individual, corporation, partnership, limited liability
company, joint venture, unincorporated association, trust or other juridical
entity, or any Governmental Authority.
"PLAN" means at any time an employee pension benefit plan as defined in
Section 3(2) of ERISA that is covered by Title IV of ERISA or that is subject
to the minimum funding
18
standards under Section 412 of the Code and is either: (i) maintained by the
Company or any member of the Controlled Group for employees of the Company,
or by the Company or any other member of the Controlled Group for employees
of any member of the Controlled Group, or (ii) maintained pursuant to a
collective bargaining agreement or any other arrangement under which more
than one employer makes contributions and to which the Company or any member
of the Controlled Group is then making or accruing an obligation to make
contributions or has within the preceding five plan years made or been
obligated to make contributions.
"POLITICAL RISK INSURANCE" means insurance insuring against the
non-payment of the Obligations and arising out of the events or circumstances
set forth in the OPIC Policy and the AIG Policy.
"POST-DEFAULT RATE" means (i) in respect of any Advances not paid when
due (whether at stated maturity, by acceleration or otherwise), a rate per
annum during the period commencing on the due date until such Advances are
paid in full equal to: (x) if such Advances are Prime Advances, 2% above the
Prime Rate as in effect from time to time plus the Applicable Margin for
Prime Advances (but in no event less than the interest rate in effect on the
due date), or (y) if such Advances are LIBOR Advances, 2% above the rate of
interest in effect thereon at the time of such default until the end of the
then current Interest Period therefor and, thereafter, 2% above the Prime
Advances as in effect from time to time plus the Applicable Margin for Prime
Advances (but in no event less than the interest rate in effect on the due
date); and (ii) in respect of other amounts payable by the Company hereunder
(other than interest) not paid when due (whether at stated maturity, by
acceleration or otherwise), a rate per annum during the period commencing on
the due date until such other amounts are paid in full equal to 2% above the
Prime Rate as in effect from time to time plus the Applicable Margin for
Prime Advances (but in no event less than the interest rate in effect on the
due date). In each case, the Post-Default Rate shall not exceed the maximum
post-default interest rate permitted by applicable law.
"PRIME ADVANCES" means Advances which bear interest at a rate based upon
the Prime Rate.
"PRIME RATE" means the prime commercial lending rate from time to time as
published in The Wall Street Journal (United States edition). Each change in
any interest rate provided for herein based upon the Prime Rate resulting
from a change in the Prime Rate to take effect on the beginning of the day of
such change in the Prime Rate.
"PROJECT COMPLETION CRITERIA" means the following:
(i) (x) the Proposed Consolidation shall have been consummated in
accordance with the provisions of Section 9.05 hereto or (y) the Company
shall believe that the circumstances in respect of, or assumptions
underlying the rationale for such Proposed Consolidation have changed and
upon explanation thereof to the Creditor, the Creditor
19
agrees to waive the foregoing condition set forth in clause (x) hereof
at its sole discretion;
(ii) the Company and each other Foreign Affiliate shall be in
compliance with all Governmental Rules other than those Governmental Rules
where failure to comply could not be reasonably expected to have a Material
Adverse Effect and the Company shall have delivered to the Creditor an
opinion to such effect from counsel, and in form and substance,
satisfactory to the Creditor;
(iii) the Company and the Foreign Affiliates shall have, on a
consolidated basis, a ratio of EBITDA to Consolidated Fixed Charges of not
less than 1.75:1.0 for the preceding 2 semi-annual periods as calculated at
the end of every semi-annual period ending June 30 and December 31.
(iv) the Commitment Termination Date shall have occurred;
(v) no Default or Event of Default has occurred and is continuing or
will occur as a result of the Stockholder Guaranty terminating;
(vi) none of the Company or any Foreign Affiliate shall be in default
under or with respect to (a) the iDEN Equipment and Service Agreements or
(b) any other System Document or (c) any other agreement, lease or
instrument to which such Person is a party or by which it or its properties
or assets may be bound except in the case of this clause (c) defaults which
could not reasonably be expected to have a Material Adverse Effect;
(vii) no action, suit, investigation or proceeding shall have been
instituted nor shall any action be threatened before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority, which, if adversely
determined, could reasonably be expected to have any Material Adverse
Effect;
(viii) (x) no action, suit, investigation or proceeding shall have
been instituted nor shall any action be threatened before any Governmental
Authority, nor shall any order, judgment or decree have been issued or
proposed to be issued by any Governmental Authority, which challenges the
consummation of the Proposed Consolidation and the transactions
contemplated thereby, and all Governmental Approvals required in connection
with the Proposed Consolidation shall be in full force and effect and
administratively non-appealable, as determined by the reissuance of the
applicable Licenses by the Ministry of Communications in the name of the
Consolidated Entity or (y) the Company shall believe that the circumstances
in respect of, or assumptions underlying the rationale for the conditions
set forth in this clause (viii) have changed and
20
upon explanation thereof to the Creditor, the Creditor agrees to waive
the foregoing conditions set forth in clause (x) hereof at its sole
discretion;
(ix) the Company shall be providing digital service to a minimum of
300,000 Subscribers;
(x) the Company shall have given notice of "Final Acceptance" (as
defined in the iDEN Equipment Agreements) pursuant to the iDEN Equipment
Agreements in respect of iDEN equipment purchased thereunder with the
proceeds of Advances made hereunder; and
(xi) (u) the Licenses held by Augustus Administracao e Participacoes
S.A. and Multiponto Telecomunicacoes Ltda. shall have been transferred to
Trunking and Trunkline and the Ministry of Communications shall have
approved such transfer, (v) the Ministry of Communications shall have
approved the exercise of the Options and the transfer of quotas in respect
thereof and the quotas subject to the Options shall have been transferred
to the Company or Xxxxxx Xxxxx, as appropriate, and the Creditor shall have
a lien on all of the assets and a pledge of all the stock of the
Consolidated Entity, the Company and each Foreign Affiliate surviving the
Proposed Consolidation (including the Option Companies) other than minority
interests in Foreign Affiliates acquired after the Closing Date pursuant to
Section 9.12 hereof, (w) the Option Companies shall have executed and
delivered a Foreign Affiliate Security Agreement in the form of Exhibit Q-1
hereto, (x) all of the shareholders or quotaholders of the Option Companies
shall have pledged the shares or quotas as applicable of the Option
Companies and delivered a Foreign Affiliate Pledge Agreement in the form of
Exhibit S hereto, (y) the Option Companies shall have executed and
delivered a Foreign Affiliate Guaranty in the form of Exhibit J hereto, and
(z) the Company shall directly or indirectly beneficially own (on a fully
diluted basis) more than 50% of the voting stock or equity interest, as the
case may be in the Consolidated Entity and any Foreign Affiliate (including
the Option Companies) surviving the Proposed Consolidation and shall own
more than 50% of the economic interests in such entities and shall
otherwise Control such entities other than minority interests in Foreign
Affiliates acquired after the Closing Date pursuant to Section 9.12 hereof.
"PROJECT COMPLETION DATE" means the date the Project Completion Criteria
have been satisfied in the reasonable determination of the Creditor as
indicated in writing by the Creditor to the Company.
"PROPOSED CONSOLIDATION" means the consolidation of the Foreign
Affiliates with the Consolidated Entity surviving such consolidation.
"RECURRING REVENUES" means total gross revenues earned by the Company and
the Foreign Affiliates from recurring revenue sources (including, without
limitation, interconnect
21
fees, monthly fees, usage fees, roaming fees, air time charges, value-added
services, each adjusted for inflation in accordance with GAAP, and additional
service charges, less the bad debt expense for that period indicated on the
income statement of the Company and the Foreign Affiliates). Recurring
Revenues shall not include equipment sales or leases of iDEN or other
subscriber units.
"REGULATION D" means Regulation D of the Board of Governors of the Federal
Reserve System, as the same may be amended or supplemented from time to time.
"REGULATORY CHANGE" means any change after the date of this Agreement in
United States federal, state or foreign laws or regulations (including
Regulation D and the laws or regulations that designate any assessment rate
relating to certificates of deposit or otherwise) or the adoption or making
after such date of any interpretations, directives or requests applying to a
class of banks of or under any United States federal, state or foreign laws or
regulations (whether or not having the force of law) by any court or
governmental or monetary authority charged with the interpretation or
administration thereof.
"REQUEST FOR FINANCING" means a request described in subsection 2.02(a)
hereof substantially in the form of Exhibit D hereto, duly completed and
executed by the Company.
"REQUIRED EQUITY INVESTMENTS" has the meaning ascribed to such term in
subsection 8.09(a) hereof.
"RESERVE REQUIREMENT" means for any LIBOR Advances for any semi annual
period (or, as the case may be, shorter period) as to which interest is payable
hereunder, the average rate at which reserves (including any marginal,
supplemental or emergency reserves) are required to be maintained during such
period by the Creditor or its assignees against "Eurocurrency liabilities" (as
such term in used in Regulation D).
"RESTRICTED ASSETS" means those assets listed on Schedule 1.02 hereto.
"SECURITIES ACT" means the Securities Act of 1933, as amended, of the
United States of America.
"SECURITY DOCUMENTS" means individually and collectively the Company
Security Agreement, the Company Security Deposit Agreement, the Company Quota
Pledge Agreement, the Company Share Pledge Agreements, the Company Promise to
Pledge Quotas (and power of attorney related thereto), the Company Quota
Voting Agreement, the Company Share Voting Agreement, the Foreign Affiliate
Security Agreements, the AirLink Promise to Pledge Quotas, the AirLink
Security Deposit Agreement, the Lease Assignment Agreements, the Foreign
Affiliate Pledge Agreements, the Xxxxxx Xxxxx Promise to Pledge Quotas (and
the power of attorney related thereto), the Foreign Affiliate Assignment of
Rights and Obligations, the Foreign Affiliate Trademark Assignment
Agreements, Foreign Affiliate Voting Agreements, the
22
Stockholder Guarantor Pledge Agreements, the Telcom Pledge Agreement, the
Consents to Assignment and any financing statements, registrations or similar
documents filed or recorded in connection with the foregoing.
"SEMI ANNUAL DATES" means June 30 and December 31.
"SHAREHOLDERS AGREEMENT" means the Shareholders Agreement, dated as of
January 29, 1997, by and among the Company, Nextel International and the Telcom
Entities.
"STOCKHOLDER GUARANTOR PLEDGE AGREEMENT(S)" has the meaning ascribed to
such term in subsection 6.01(b)(i) hereof.
"STOCKHOLDER GUARANTORS" means Nextel International, Motorola do Brasil and
each other Acceptable Guarantor executing and delivering a Stockholder Guaranty.
"STOCKHOLDER GUARANTY(IES)" has the meaning ascribed to such term in
Section 5.01 hereof.
"SUBSCRIBER" means, as at any date, the number of units employing digital
technology, subscribing to, and paying for, communications services provided by
the Company or the Foreign Affiliates for a period of not less than thirty (30)
days as of such date, excluding any such unit to the extent the accounts
receivable generated by operation of such unit are more than ninety (90) days
past due as of such date.
"SUBSIDIARY" means (a) a company of which for the time being (i) any Person
controls the composition of the Board of Directors or the appointment of the
delegate managers or is the managing quotaholder; or (ii) such Person holds more
than 50% in par value of the issued and outstanding capital stock or quotas; or
(b) a company which is a subsidiary of any company which is a subsidiary of such
Person.
"SYSTEM" means the wireless communications system to be constructed and
operated in Brazil by Nextel International or its Affiliates utilizing the iDEN
based digital enhanced specialized mobile radio technology.
"SYSTEM DOCUMENTS" means the (i) iDEN Equipment and Services Agreements,
(ii) the Management Agreements, (iii) the Leases, (iv) the Conditional Sale
Agreements, (v) the Option Agreements, and (vi) any Additional System Document.
"SYSTEM PARTY" means the Company, the Foreign Affiliates and each other
party to any System Document.
"SYSTEM RESERVES" has the meaning ascribed to such term in subsection
8.09(b) hereof.
23
"SYSTEM REVENUES" means all income and receipts derived from the ownership
or operation of the System and the Telecommunications Business, including
without limitation proceeds of any business interruption insurance, income
derived from the operation of the System and the Telecommunications Business,
all as determined in conformity with cash accounting principles and the
investment income on the U.S. Accounts and the AirLink Accounts.
"TAXES" means, with respect to the Creditor, any present or future taxes,
levies, imposts, stamp, duties, fees, charges, deductions, withholding,
restrictions or conditions of any nature whatsoever imposed, levied, collected,
assessed or withheld by or within Brazil or any political subdivisions or taxing
authority thereof or therein or by or within any jurisdiction from which payment
is made on account of the transactions contemplated by the Credit Documents, but
excluding taxes on the overall net income of the Creditor (other than taxes on
interest payments or all other payments to be made in pursuance to the Credit
Documents).
"TELCOM" means Telcom Ventures, L.L.C.
"TELCOM ENTITIES" mean collectively (i) South Beach Ventures, Inc., (ii)
Xxxxxxxx Xxxxx, (iii) Xxxxx Xxxxx, (iv) The Xxxxx Xxx Singh Education Trust, (v)
The Samir Xxx Xxxxx Education Trust, (vi) Xxxxxx Xxxxx, and (vii) Xxxxxxx
Xxxxxx.
"TELCOM PLEDGE AGREEMENT" has the meaning ascribed to such term in
subsection 6.01(c)(i) hereof.
"TELECOMMUNICATIONS BUSINESS" means radio paging, mobile communications,
personal communications services and related wireless services in Brazil in
which the Company or any Foreign Affiliate is engaged.
"TRADEMARK LICENSE AGREEMENT" means the Trademark License Agreement, dated
the date hereof, between Motorola, Inc. and AirLink.
"TRUNKING" means Trunking do Brasil Servicos de Telecomunicacoes Ltda.
"TRUNKLINE" means Trunkline Telecomunicacoes e Servicos Ltda.
"U.S. ACCOUNTS" means the U.S. Receipt Account and the U.S. Debt Service
Account.
"U.S. DEBT SERVICE ACCOUNT" has the meaning ascribed to such term in
Section 1 of the Company Security Deposit Agreement.
"U.S. RECEIPT ACCOUNT" has the meaning ascribed to such term in Section 1
of the Company Security Deposit Agreement.
24
"USE OF FUNDS SCHEDULE" has the meaning ascribed to such term in subsection
8.04(d) hereof.
"VENDOR" has the meaning ascribed to such term in the first preamble
hereof.
"VENDOR FINANCING AGREEMENT" means the Vendor Financing Agreement dated
September 27, 1996 by and among Nextel, the Creditor and the other parties
listed therein.
"VIA RADIO" means Via Radio Administracaca e Participacoes Ltda.
"VIA RADIO-1" means Via Radio-1 Telecomunicacoes Ltda., a Brazilian limited
liability quota company.
"VOTING STOCK" means Securities of any class or classes, the holders of
which are ordinarily, in the absence of contingencies, entitled to vote in the
election of the corporate directors (or Persons performing similar functions).
"WIRELESS" means the Company in existence prior to January 29, 1997.
SECTION 1.02 INTERPRETATION.
In this Agreement the singular includes the plural and the plural the
singular; words importing any gender include the other gender; references to
statutes or regulations are to be construed as including all statutory or
regulatory provisions consolidating, amending or replacing the statute or
regulation referred to; references to "writing" include printing, typing,
lithography and other means of reproducing words in a tangible visible form;
references to articles, sections (or subdivisions of sections), exhibits,
annexes or schedules are to this Agreement unless otherwise indicated;
references to agreements and other contractual instruments shall be deemed to
include all schedules and exhibits to such agreement and all subsequent
amendments and other modifications to such agreements and contractual
instruments, but only to the extent such amendments and other modifications are
not prohibited by the terms of this Agreement, unless otherwise indicated; and
references to Persons include their respective permitted successors and assigns
and, in the case of Governmental Authorities, Persons succeeding to their
respective functions and capacities.
SECTION 1.03 ACCOUNTING PRINCIPLES AND TERMS.
Except as otherwise provided in this Agreement: (a) all computations and
determinations as to financial matters, and all financial statements to be
delivered under this Agreement, shall be made or prepared in accordance with
generally accepted accounting principles in effect in the United States
(including principles of consolidation where appropriate) applied on a
consistent basis; and (b) all accounting terms used in this Agreement shall
have the meanings respectively ascribed to such terms by such principles.
25
SECTION 2. ADVANCES
SECTION 2.01 THE COMMITMENT.
(a) The Creditor agrees, upon the terms and subject to the conditions
hereinafter set forth, to make credit available in Dollars to the Company
during the Availability Period in an aggregate principal amount up to but not
exceeding the Available Commitment (each such advance being referred to as an
"ADVANCE"; and collectively as the "ADVANCES"). The Creditor represents,
warrants and covenants that no part of the funds to be used by it to make or
hold any Advance constitutes, directly and indirectly, the assets of an
"employee benefit plan", within the meaning of Section 3(3) of ERISA, or a
"plan", within the meaning of Section 4975(e)(1) of the Code.
Notwithstanding anything to the contrary contained in this Agreement: (i) no
Motorola Entity shall be under any obligation to make any Advance hereunder
if, on the date proposed for such Advance and after giving effect thereto,
(x) the aggregate Outstanding Advance Amount exceeds $650,000,000, or (y) the
aggregate Outstanding Foreign Advance Amount exceeds $400,000,000, and (ii)
no lender hereunder shall have any obligation to make any Advance hereunder
if the amount of the requested Advance exceeds the amount due and payable
(excluding import taxes and/or duties) set forth in the applicable Invoice.
(b) Subject to and upon the terms and conditions of this Agreement,
the Company may, at its option, avail itself of the Available Commitment in
one or more drawdowns subject to a minimum amount of $500,000, but in any
event not in excess of the remaining aggregate amount of the Available
Commitment.
(c) Each Advance shall be either a Prime Advance or a LIBOR Advance
(each being a "type" of Advance as the Company shall specify in the
applicable Request for Financing).
SECTION 2.02 PROCEDURE FOR BORROWING.
(a) The Company shall deliver to the Creditor at the address listed in
Section 12.07 hereof, at least three (3) Business Days in the case of a LIBOR
Advance and one (1) Business Day in the case of a Prime Advance prior to each
proposed financing hereunder, (i) a Request for Financing for each Advance
which shall specify (A) the type of the Advance (LIBOR Advance or Prime
Advance and in the case of a Prime Advance whether such Prime Advance will be
converted to a LIBOR Advance on the next Semi Annual Date), (B) the date of
the financing (the "DRAWDOWN DATE"), (C) the principal amount to be financed,
and (D) the recipient of such Advance, (ii) proper invoices for iDEN
equipment and services (which state the amount due and payable or reasonably
satisfactory evidence that any down payment or milestone payment was paid or
is due under the iDEN Equipment and Service Agreements which is to be paid or
reimbursed with the Advance requested in such Request for Financing)
purchased by the Company under the iDEN Equipment and Service Agreements
together with any associated xxxx of lading or other relevant evidence of
shipment (such documents being collectively referred to as an "INVOICE") or
such other documentation as is reasonably acceptable to the Creditor, and
26
(iii) a Drawdown Certificate. Upon receipt of such documentation and subject
to the limitations set forth herein (including subsection 2.01(a) hereof),
the Creditor shall advance to the Vendor (or otherwise as directed by the
Company pursuant hereto) a principal amount which shall equal the least of
(x) the amount requested as an Advance pursuant to such Request for
Financing, (y) the amount paid or due and payable as reflected in the Invoice
submitted in connection with such Request for Financing exclusive of import
taxes and/or other duties, or (z) subject to Section 2.01 hereof, the
Available Commitment. Any Request for Financing, once delivered to the
Creditor, shall be irrevocable and shall commit the Company to receive the
amount to be advanced by the Creditor pursuant to the immediately preceding
sentence on the date specified therein. If the proceeds of the financing are
to be used as permitted by clause (ii) of Section 2.08 hereof, the Company
shall designate Nextel International or the Company as the recipient of the
proceeds in its Request for Financing and otherwise comply with the procedure
for borrowing set forth above. If the Company requests a LIBOR Advance and
the Drawdown Date is not a Semi Annual Date, the Company in its Request for
Financing shall either request that (I) the Creditor make a Prime Advance on
the Drawdown Date and convert such Prime Advance into a LIBOR Advance on the
next Semi Annual Date or (II) the Creditor make a LIBOR Advance on the
Drawdown Date. If the Company requests a LIBOR Advance pursuant to clause
(II) above, the Company shall, subject to subsection 2.05(c) hereof (i) repay
such LIBOR Advance on the next Semi Annual Date, and (ii) the Creditor shall
make a LIBOR Advance on such Semi Annual Date in an amount equal to the LIBOR
Advance repaid on such date. In the case of any LIBOR Advance made on a day
other than a Semi Annual Date, the Creditor may elect an Interest Period for
such IBOR Advance having a duration which is the next larger period than the
period of time commencing on the date such LIBOR Advance is made and ending
the next Semi Annual Date (it being agreed that such LIBOR Advance will be
repaid on such next Semi Annual Date notwithstanding that the Interest Period
thereof will not have expired and that such repayment will be subject to the
provisions of subsection 2.05(c) hereof).
(b) Not later than 2:00 p.m., New York City time, on the date
specified in the Request for Financing, but subject to the terms and
conditions hereof and to the fulfillment of all applicable conditions set
forth in subsection 2.02(a), Section 2.03 and Section 10 hereof, the Creditor
shall pay the amount described in the second sentence of subsection 2.02(a)
hereof, directly to the Vendor at the account specified in the Request for
Financing or any other account specified in the instructions given in the
Request of Financing. The Company authorizes and directs the Creditor to,
without any further action or instruction (other than as set forth in the
Request for Financing), disburse the proceeds of such Advance directly to the
Vendor (or, in the case of reimbursement for previous payments, Nextel
International or the Company, as appropriate) as specified in the Request for
Financing. The Company acknowledges that disbursement of funds to a Person
other than the Company in accordance with the Request for Financing pursuant
to the immediately preceding sentence shall be deemed receipt by the Company
of the proceeds of the Advances made hereunder.
27
SECTION 2.03 FINANCING NOTE.
The Advances made by the Creditor hereunder shall be evidenced by and be
payable by the Company in accordance with the terms of a single financing
note of the Company substantially in the form of Exhibit F hereto (the
"FINANCING NOTE"), dated the Initial Funding Date, and be payable to the
order of the Creditor in a principal amount equal to the $125,000,000;
SUBJECT, HOWEVER, to the provisions of the Financing Note to the effect that
the principal amount payable thereunder at any time shall not exceed the then
unpaid principal amount of the Advances. The Company hereby irrevocably
authorizes the Creditor to make or cause to be made, at or after the time of
each Advance, an appropriate notation on the records of the Creditor,
including the Financing Note, reflecting the principal amount of such
Advance, and the Creditor shall make or cause to be made, at or after the
time of receipt of payment of any principal of any Advance, an appropriate
notation on its records and such Financing Note reflecting such payment and
the Creditor will, prior to any transfer of the Financing Note, endorse on
the reverse side thereof the outstanding principal amount of the Advances
evidenced thereby. Failure to make any such notation shall not affect the
Company's obligations in respect of such Advances.
SECTION 2.04 REPAYMENT OF PRINCIPAL OF ADVANCES.
(a) The Company shall pay to the Creditor the principal of the Advances
made by the Creditor outstanding at the close of business on the Commitment
Termination Date in eight (8) consecutive semi-annual installments on the
Payment Dates (provided that the last such payment shall be in an amount
sufficient to repay in full the principal amount of such Advances), with the
amount of the installment paid on each Payment Date to be equal to the
respective percentages of the principal of such Advances outstanding at the
close of business on the Commitment Termination Date as set forth below:
Percentage of Original
Principal of
Payment Date Advance Payable on such Payment Date
-------------- ------------------------------------
June 30, 2000 10%
December 31, 2000 10%
June 30, 2001 10%
December 31, 2001 10%
June 30, 2002 15%
December 31, 2002 15%
June 30, 2003 15%
December 31, 2003 15%
28
(b) The Advances shall be repaid as and when necessary to cause the
aggregate principal amount of the Advances outstanding not to exceed the
Available Commitment and as required by subsection 2.05(a) hereof.
SECTION 2.05 PREPAYMENTS.
(a) MANDATORY PREPAYMENT.
The Company shall prepay Advances on the dates and in the
principal amounts described below together with all accrued interest on such
principal prepaid to date of prepayment:
(i) not later than the date 120 days (or 150 days, in the event
that (x) the Foreign Resident Account of the Company is no longer permitted
under applicable law or (y) the use of such Foreign Resident Account would
result in a significant cost to the Company and in each case the Brazilian
Central Bank approval for such prepayment is pending, so long as the
Company is using reasonable efforts to obtain such approval), after the end
of each fiscal year of the Company (commencing with the fiscal year ending
on December 31, 1998), the Company shall prepay Advances in an aggregate
amount equal to 50% of Excess Cash Flow for such fiscal year from amounts
contained in the U.S. Receipt Account;
(ii) if at any time the Outstanding Advance Amount is greater than
$650,000,000, the Company shall prepay Advances not later than five (5)
Business Days after the date that such determination is made in a principal
amount equal to the Maximum Total Advance Excess;
(iii) if at any time the Outstanding Foreign Advance Amount is
greater than $400,000,000, the Company shall prepay Advances not later than
five (5) Business Days after the date that such determination is made in a
principal amount equal to the Maximum Total Foreign Advance Excess;
(iv) on the dates and the amounts specified in subsection 2.06(b)
and Sections 2.09 or 2.10 hereof if the Company shall be required to prepay
the Advances pursuant to such Sections; and
(v) if any Affiliated Company makes a payment to the Creditor or
any other Motorola Entity pursuant to the Vendor Financing Agreement or any
other agreement in effect between any Motorola Entity and any of the
Affiliated Companies that relates to the iDEN equipment and services, then
during the Availability Period, the Company may reborrow an amount equal to
the least of (i) the aggregate amount prepaid by the Company pursuant to
subsections 2.05(a)(ii) and (iii) hereof, (ii) the amounts so paid by the
Affiliated Companies, (iii) an amount which will cause the aggregate
Outstanding
29
Advance Amount to equal $650,000,000, and (iv) an amount which will cause
the aggregate Outstanding Foreign Advance Amount to equal $400,000,000.
(b) OPTIONAL PREPAYMENT.
The Company may prepay Advances, in whole or in part, in integral
multiples of $100,000 upon not less than thirty (30) days prior written
notice to the Creditor of the principal amount to be prepaid and the date of
such prepayment. On the date specified for prepayment, the Company shall pay
such principal amount plus accrued interest on such principal amount prepaid
to the date of such prepayment. Notwithstanding the foregoing, unless the
conditions set forth in subsection 2.05(c) hereof shall be simultaneously
satisfied, LIBOR Advances may be only repaid on the last day of the Interest
Period for such LIBOR Advance. A notice of prepayment once received shall be
irrevocable and binding on the Company.
(c) BROKEN FUNDING INDEMNIFICATION.
The Company shall pay to the Creditor, such amount or amounts as
shall compensate the Creditor for any loss, cost or expense incurred by the
Creditor (as reasonably determined and documented by the Creditor) as a
result of:
(i) any prepayment or repayment of a LIBOR Advance on a date other
than the last day of the Interest Period for such LIBOR Advance; or
(ii) any failure by the Company to borrow a LIBOR Advance on the
Drawdown Date specified in the relevant Request for Financing under Section
2.02 hereof, such compensation to include, without limitation, an amount
equal to: (x) any loss or expense suffered by the Creditor during the
period from such failure to borrow to the last day of such Interest Period
if the rate of interest obtainable by the Creditor upon the redeployment of
an amount of funds equal to the amount not borrowed is less than the rate
of interest applicable to such LIBOR Advance for such Interest Period or
(y) any loss or expense suffered by the Creditor in liquidating LIBOR
deposits prior to maturity.
The Company shall pay any amount due hereunder no later than seven
(7) days after receipt of an invoice therefor from the Creditor.
(d) EFFECT OF PREPAYMENT.
All Advances prepaid, whether by mandatory or optional
prepayment, may not be reborrowed (except as provided in subsection
2.05(a)(v) hereof and amounts repaid pursuant to clause (i) of penultimate
sentence of subsection 2.02(a) hereof) and the Commitment shall automatically
be reduced by the amount of such prepayment.
(e) CERTAIN REIMBURSEMENTS IN RESPECT OF PREPAYMENTS.
30
Without affecting the obligations of the Company set forth above, the
Creditor acknowledges that (i) the primary source of funds for the prepayments
described above will be revenue generated in Brazil by the operations of the
Foreign Affiliates and that the Company expects to make any required prepayments
from corresponding prepayment amounts which AirLink is obligated to make to the
Company under the Conditional Sale Agreements, and (ii) the transferring of the
amounts for such prepayments under the Conditional Sale Agreements will be
subject to the approval of the Central Bank in Brazil. In the event that (i)
(x) the Company is prohibited by applicable law from maintaining a Foreign
Resident Account or (y) the use of such Foreign Resident Account would result in
a significant cost to the Company, and (ii) the approval of the Central Bank is
not obtained within the applicable periods provided for above (notwithstanding
the reasonable efforts of the Company and AirLink to obtain such approval),
Nextel International may make an intercompany loan to the Company in the amount
of such prepayment no later than 151 days after the end of such fiscal year.
Simultaneously with the receipt of such intercompany loan, the Company shall use
the proceeds thereof to make the prepayment required pursuant to this Section
2.05. After making such prepayment and so long as no Default shall have
occurred and is continuing under this Agreement, then such intercompany loan may
be repaid directly or indirectly to Nextel International by the Company or
AirLink pursuant to the terms of the Company Security Deposit Agreement and the
AirLink Security Deposit Agreement.
SECTION 2.06 INTEREST.
(a) The Company shall pay to the Creditor interest on the outstanding
principal amount of each Advance made by the Creditor, for the period commencing
on the date of such Advance until such Advance is paid in full, at the following
rate per annum:
(i) if such Advance is a Prime Advance, a rate per annum equal to
the Prime Rate (as in effect from time to time) plus the Applicable Margin;
and
(ii) if such Advance is a LIBOR Advance, for each Interest Period
relating thereto, the LIBOR Rate for such Advance plus the Applicable
Margin.
Accrued interest on each Advance shall be paid in arrears on the Interest
Payment Dates. Notwithstanding the foregoing, Interest that is payable at the
Post-Default Rate shall be payable from time to time on demand of the Creditor.
(b) Anything herein to the contrary notwithstanding, if, on or prior
to the determination of an interest rate for any LIBOR Advance for any Interest
Period therefor, the Creditor reasonably determines (which determination shall
be conclusive absent manifest error):
(i) by reason of any event affecting the money markets in the
United States of America or the London interbank market, quotations of
interest rates for the relevant deposits are not being provided in the
relevant amounts or for the relevant maturities for
31
purposes of determining the rate of interest for such LIBOR Advances
under this Agreement; or
(ii) the rates of interest referred to in the definition of
"LIBOR Base Rate" in Section 1.01 hereof upon the basis of which the rate
of interest on any LIBOR Advance for such period is determined, do not
accurately reflect the cost to the Creditor of making or maintaining such
LIBOR Advance for such period,
then the Creditor shall give the Company prompt notice thereof (and shall
thereafter give the Company prompt notice of the cessation, if any, of such
condition), and so long as such condition remains in effect, the Creditor shall
be under no obligation to make LIBOR Advances or to convert Prime Advances into
LIBOR Advances pursuant to subsection 2.02(a) hereof and the Company shall, on
the last day(s) of the then current Interest Period(s) for the outstanding LIBOR
Advances either prepay such LIBOR Advances in accordance with Section 2.05
hereof or convert such LIBOR Advances in Prime Advances.
(c) Without prejudice to the provisions of Section 11.02 hereof, in
the event of default by the Company in payment of any principal amount of the
Advances or interest thereon when due (whether at the stated maturity, by
acceleration or otherwise), the Company shall pay to the Creditor interest on
such past due and unpaid principal amount and (to the extent permitted by
applicable law) on such defaulted interest from the due date until the date of
payment in full (both before as well as after judgment), at the Post-Default
Rate. In addition, the Company shall indemnify the Creditor against any loss or
expense which it may sustain or incur as a direct consequence of the default by
the Company in payment of any principal amount of the Advances or interest
thereon. Each determination of any loss or expense by the Creditor under this
paragraph (c) shall be conclusive in the absence of manifest error.
(d) Interest on all Prime Advances shall be computed on the basis of
a year of 365/366 days and actual days elapsed (including the first day but
excluding the last) occurring in the period for which payable and interest on
all LIBOR Advances shall be computed on the basis of 360 days and actual days
elapsed (including the first day but excluding the last) occurring in the period
for which payable.
SECTION 2.07 PAYMENTS.
(a) Except as otherwise provided herein, all payments whatsoever by
the Company to the Creditor hereunder or under the Financing Note shall be made
in Dollars in same-day funds to the order of Motorola, Inc. at Xxxxxx Bank,
Chicago, Illinois, USA, ABA# 000-000-000, for the account of Motorola Credit
Corporation, Account# 350-9551 (or such other place as the Creditor shall have
designated in writing to the Company at least five (5) Business Days prior to
the scheduled payment date), not later than 2:00 p.m. New York time, on the day
on which such payment shall become due. Any amounts received after such time on
any date may,
32
in the discretion of the Creditor, be deemed to have been received on the
next succeeding Business Day for purposes of calculating interest thereon.
(b) If any payment hereunder or under the Financing Note would
otherwise be due on a day that is not a Business Day, such payment shall be made
on the next succeeding day that is a Business Day and including the additional
days elapsed in the computation of the interest payable on such next succeeding
Business Day.
SECTION 2.08 USE OF PROCEEDS.
The Company agrees that the proceeds of the Advances will be used by the
Company solely to finance the purchase of equipment and services acquired
pursuant to the iDEN Equipment and Service Agreements (including down payments,
milestone payments and other payments due under the iDEN Equipment and Service
Agreements) to be used in connection with the System excluding import taxes
and/or duties related thereto. If the Initial Funding Date occurs on or prior
to November 21, 1997, the proceeds of the initial Advance may also be used by
the Company to reimburse Nextel International or the Company for any payments
made (other than import taxes and/or duties) for the purchase of or toward
purchase of equipment and services pursuant to the iDEN Equipment and Services
Agreements (including down payments, milestone payments and other payments due
under the iDEN Equipment and Service Agreements).
SECTION 2.09 CHANGE IN LAW.
If any change in applicable law or regulation or in the interpretation
thereof by any Governmental Authority charged with the administration thereof
has made (or has made it apparent that it is) unlawful for any Credit Party to
perform any of its obligations under any of the Credit Documents and such change
could reasonably be expected to have a Material Adverse Effect then (i) the
Creditor shall be discharged from all obligation to make, renew or maintain the
Advances, and (ii) the Company shall on demand pay to the Creditor without
premium or penalty the outstanding principal amount of the Advances together
with accrued interest thereon and all other moneys due to the Creditor
hereunder; PROVIDED, THAT for so long as the Company is diligently pursuing the
contest of the same by appropriate proceedings and such contest could not
reasonably be expected to have a Material Adverse Effect and adequate reserves
have been established in accordance with GAAP, then the Creditor shall not be so
discharged and the Company shall not be required to so pay upon demand.
SECTION 2.10 ILLEGALITY.
If any change in applicable law or regulation or in the interpretation
thereof by any Governmental Authority charged with the administration thereof
has made (or has made it apparent that it is) unlawful for the Creditor to
perform its obligations hereunder, then (i) the Creditor shall be discharged
from all obligations to make, renew or maintain the Advances and
33
(ii) Company agrees to pay on demand to the Creditor without premium or
penalty the outstanding principal amount of the Advances together with
accrued interest thereon and all other moneys due to the Creditor hereunder.
Notwithstanding the foregoing, the Creditor will use reasonable endeavors to
assist in any restructuring necessitated by this Section 2.10; PROVIDED,
HOWEVER, that the Creditor shall be under no obligation to take any action
the effect or likely effect of which, in the opinion of the Creditor could
reasonably be expected to have an adverse effect upon the Creditor; PROVIDED,
FURTHER, that the Company shall reimburse the Creditor on demand for all
expenses (including attorneys' fees) incurred by the Creditor in assisting in
any such restructuring.
SECTION 3. FUNDING AND YIELD PROTECTION
SECTION 3.01 TAXES, DUTIES, FEES AND CHARGES.
(a) All payments due to the Creditor under any of the Credit
Documents, whether of principal, interest, penalties, fees or otherwise,
including payments made under this subsection 3.01(a), shall be made without
set-off, withholding or counterclaim, and free and clear and without any
deduction or withholding on account of any Taxes, all of which shall be for the
account of the Company and paid by it directly to the relevant taxing or other
authority when due. If the Company shall be required by law to make any
deduction or withholding in respect of Taxes from any payment hereunder,
including payments made under this subsection 3.01(a), the sum payable shall be
increased to such sum as will result in the receipt by the Creditor after such
deduction or withholding, of the amount that would have been received if such
deduction or withholding had not been required.
(b) The Company agrees to pay any Taxes imposed on or with regard to
the execution, formalization, registration, recordation or perfection of any of
the Operative Documents or any other documentation contemplated hereunder or
delivered pursuant hereto.
(c) The Company shall deliver to the Creditor within thirty days
after the payment thereof copies of the receipts evidencing payment of any
withholding taxes to any Governmental Authority.
SECTION 3.02 CHANGE IN CIRCUMSTANCES.
(a) In the event that there shall hereafter occur any change in any
Governmental Rule which increases or will increase (i) the cost of maintaining
any reserves or special deposits against the Commitment or the LIBOR Advances or
(ii) any other cost of complying with any law, regulation or condition with
respect to the Commitment or the LIBOR Advances, and the result of any of the
foregoing is or will be to increase the cost to the Creditor of making or
maintaining the Commitment or the LIBOR Advances or to reduce the amount of any
payment (whether of principal, interest or otherwise) receivable by the Creditor
hereunder, then upon receipt of a request from the Creditor the Company shall
pay or reimburse to the Creditor such
34
amount as will compensate the Creditor for such additional cost or reduction
of payment; PROVIDED that the Company shall only be liable for such costs
applicable to LIBOR Advances then outstanding. Amounts payable hereunder
shall be due seven (7) days after invoice therefor.
(b) The protection of subsection 3.02(a) hereof shall apply to
voluntary compliance by the Creditor with restraints, guidelines or policies not
having the force of law and shall apply if the Creditor shall comply with any
law, regulation or condition irrespective of any possible contention of
invalidity or non-applicability thereof.
(c) The Creditor will promptly (but in no event later than twenty
(20) days after actual knowledge of the occurrence of the event described in
subsection 3.02(a) hereof) inform the Company by facsimile of its intention to
claim indemnification under this Section 3.02. The facsimile statement of the
Creditor as to the amount sufficient to indemnify the Creditor against any
increased cost, reduction or payment incurred, suffered or made by the Creditor,
supported by the computations made by the Creditor in arriving at such figure,
shall, in the absence of manifest error, be conclusive as to the amount thereof
and binding on Company.
A claim made under this Section 3.02 may be made before or after the end of
the Interest Period to which such claim relates and before or after any
repayment of all or part of the Advance to which such Interest Period relates;
PROVIDED, THAT the Company shall in no event be liable for any payment under
this Section 3.02 with respect to more than one Interest Period for each claim
made under this Section 3.02. An increased cost shall be an increased cost for
the purpose of subsection 3.02(a) hereof even if the payment or quantification
of such increased cost is not or cannot be made until after the expiry of any
Interest Period to which it relates.
(d) In the event of any such change or request as is contemplated by
subsection 3.02(a) hereof, the Creditor will use reasonable endeavors to
mitigate the effect or likely effect of such change or request by transferring
the LIBOR Advances to another jurisdiction or otherwise; provided, however, that
the Creditor shall be under no obligation to transfer the LIBOR Advances to
another jurisdiction or to take any other action to mitigate the effect or
likely effect of such change or request if, in the reasonable opinion of the
Creditor, such transfer or other action could reasonably be expected to have an
adverse effect upon the Creditor, whether as a result of taxes, credit policies,
political considerations or otherwise; PROVIDED, FURTHER, that the Company shall
reimburse the Creditor on demand for all expenses (including attorney's fees)
incurred by the Creditor in effecting such transfer (if such transfer is
requested by the Company) and the Creditor shall have no obligation to effect
any such transfer unless the Creditor is satisfied that it will not suffer any
adverse consequences as a result of such transfer for which it has not been
indemnified by the Company. If the Creditor is entitled to reimbursement under
this subsection 3.02(d) for any cost, the Creditor shall deliver to the Company
a statement of the nature and amount of such cost which statement shall
constitute prima facie evidence as to the amount due to the Creditor under this
subsection 3.02(d).
35
(e) If the Company elects (which election shall be irrevocable) by
giving at least two (2) Business Days prior written notice to the Creditor, the
Company may, without penalty or premium, prepay to the Creditor any outstanding
Advances on any Interest Payment Date applicable to such Advances with respect
to which the Company has received a claim under this Section 3.02 together with
accrued interest thereon and all other sums due to the Creditor (including
amounts accrued or due under this Section 3.02).
SECTION 4. EXPENSES; INDEMNIFICATION; FEES
SECTION 4.01 EXPENSES.
The Company agrees to pay, whether or not any Advance is made hereunder, on
demand: (a) all reasonable out-of-pocket costs and expenses of the Creditor
incurred in connection with the negotiation, preparation, execution and delivery
of the Credit Documents (including without limitation all costs and expenses of
registering, recording and perfecting the security interests contemplated by the
Security Documents) and the review prior to the Initial Funding Date of the
System Documents and any of the other documents, agreements and instruments
referred to in this Agreement or relating to the transactions contemplated
hereby; (b) the reasonable fees and expenses of the Creditor's expert
consultants; (c) the reasonable fees and disbursements of Xxxxxx, Xxxxxxxxxx &
Xxxxxxxxx LLP, New York counsel to the Creditor and of Xxxxxx Filho, Xxxxx
Filho, Marrey Jr., Moherdaui e Xxxxxxx Advogados, Brazilian counsel to the
Creditor, incurred in connection with such negotiation, preparation, execution
and delivery of the Credit Documents and the review prior to the Initial Funding
Date of the System Documents and any of the other documents, agreements and
instruments referred to in this Agreement or relating to the transactions
contemplated hereby; (d) all reasonable out-of-pocket costs and expenses of the
Creditor (including the fees and disbursements of counsel) incurred in
connection with the negotiation, preparation, execution and delivery of any
amendment or waiver of, or supplement or modification to, the Operative
Documents and not solely requested by the Creditor; (e) all costs and expenses
(including legal fees and disbursements of counsel) incident to the enforcement,
protection or preservation of any right or claim of the Creditor under any of
the Operative Documents; and (f) all transfer, stamp, documentary or other
similar taxes, assessments or charges, if any, upon any of the System Documents
and the Credit Documents. Fees shall be deemed reasonable to the extent they
are reviewed and approved by the Creditor.
SECTION 4.02 INDEMNIFICATION.
(a) Without in any way limiting the applicability of subsection
4.02(b) hereof, and without regard to whether the Company or any other Person
has disclosed any fact to the Creditor, the Company hereby indemnifies and holds
harmless the Creditor and each of its respective officers, directors, employees,
consultants, advisors and agents (collectively, the "INDEMNITIES") from and
against any and all actions, suits, claims, damages, demands, judgments, losses,
liabilities, costs or expenses whatsoever, including reasonable attorneys' fees,
which any Indemnitee may sustain or incur (or which may be claimed against the
Creditor by
36
any Person or entity whatsoever) to the extent arising by reason of or in
connection with the construction, ownership or operation of the System or the
Telecommunications Business or the execution and delivery of, or payment or
failure to pay the Obligations, or the occurrence of an Event of Default or
the pursuit by the Creditor of any legal remedy in connection with an Event
of Default or arising out of or in connection with the Creditor's entering
into this Agreement or the Security Documents, or enforcing their remedies
hereunder or thereunder; PROVIDED that, the Company shall not be required to
indemnify the Creditor for any actions, suits, claims, damages, demands,
judgments, losses, liabilities, costs or expenses to the extent, but only to
the extent, caused by the Creditor's willful misconduct or gross negligence,
or to the extent caused by the acts or omissions of the Creditor after taking
possession and control of the System or the Telecommunications Business upon
foreclosure. Fees shall be deemed reasonable to the extent they are reviewed
and approved by the Creditor.
(b) Notwithstanding anything in subsection 4.02(a) hereof to the
contrary, and without regard to whether the Company or any other Person has
disclosed any fact to the Creditor, the Company agrees to indemnify, defend
and hold the Indemnities free and harmless from and against any and all
actions, suits, claims, demands, judgments, liabilities, losses, costs,
damages and expenses (including, without limitation, reasonable attorneys'
fees and expenses and other expenses incurred in connection with
environmental compliance and clean-up obligations imposed under any
Environmental Laws) any such Indemnitee may sustain by reason of the
assertion against it by any party of any claim (including claims for
indemnification or contribution and claims by third parties for death,
personal injury, illness or loss of or damage to property or economic loss)
in connection with any Materials of Environmental Concern used, generated,
treated, stored, recycled, disposed of, handled, discharged or otherwise
located or released in, on, under or from the System, the Telecommunications
Business, Collateral or Property, except to the extent resulting from such
Indemnitee's grossly negligent act or willful misconduct with respect to such
Materials of Environmental Concern.
(c) Nothing contained in this Section 4.02 shall in any way
diminish any of the Company's rights or the Vendor's obligations under the
iDEN Equipment and Service Agreements.
SECTION 5. STOCKHOLDER GUARANTIES AND FOREIGN AFFILIATE GUARANTIES
SECTION 5.01 STOCKHOLDER GUARANTIES.
The due payment and performance of the Obligations shall be guaranteed to
the Creditor by (i) Nextel International, severally, for 93.9% of the aggregate
Obligations (as such percentile may be adjusted in accordance with the terms
hereof and Section 15 of the Nextel International Guaranty), by the execution
and delivery to the Creditor, simultaneously with the execution and delivery of
this Agreement, by Nextel International of a guaranty in the form of Exhibit I-1
hereto (the "NEXTEL INTERNATIONAL GUARANTY"), and (ii) by Motorola do Brasil,
severally, for 6.1%
37
of the aggregate Obligations (as such percentile may be adjusted in
accordance with the terms hereof and Section 15 of the Nextel International
Guaranty), by the execution and delivery to the Creditor, simultaneously with
the execution and delivery of this Agreement, by Motorola do Brasil of a
Guaranty in the form of Exhibit I-2 hereto (the "MOTOROLA DO BRASIL GUARANTY"
and together with the Nextel International Guaranty and any other guaranty
executed by a Stockholder Guarantor in favor of the Creditor, hereinafter
referred to individually as a "STOCKHOLDER GUARANTY"; and collectively, the
"STOCKHOLDER GUARANTIES"). Nextel International may assign a portion of its
obligations under its Stockholder Guaranty to an Acceptable Guarantor subject
to the terms and conditions of Section 15 of the Nextel International
Guaranty it being understood that in no event may any such assignment result
in Nextel International guaranteeing less than 70% of the Obligations.
SECTION 5.02 FOREIGN AFFILIATE GUARANTIES.
The due payment and performance of the Obligations shall be guaranteed to
the Creditor by each Majority-Owned Foreign Affiliate and MCS, by the execution
and delivery to the Creditor, simultaneously with the execution and delivery of
this Agreement, by each Majority-Owned Foreign Affiliate and MCS of a guaranty
in the form of Exhibit J hereto (as hereinafter referred to individually as the
"FOREIGN AFFILIATE GUARANTY"; and collectively the "FOREIGN AFFILIATE
GUARANTIES").
SECTION 6. SECURITY
SECTION 6.01 SECURITY.
(a) In order to secure the due payment and performance by the
Company of the Obligations, simultaneously with the execution and delivery of
this Agreement:
(i) The Company shall:
(A) Grant to the Creditor a Lien on all of the Company's
personal properties and assets (excluding Restricted Assets), whether now
owned or hereafter acquired, tangible and intangible, by the execution and
delivery to the Creditor of a Security Agreement in the form of Exhibit K
hereto (the "COMPANY SECURITY AGREEMENT"), a Security Deposit Agreement in
the form of Exhibit L hereto (the "COMPANY SECURITY DEPOSIT AGREEMENT") and
endorsed the Conditional Sale Notes in favor of the Creditor;
(B) Grant to the Creditor a Lien on and pledge with the
Creditor, all of the issued and outstanding quotas or shares, as the case
may be, of its Subsidiaries (including, without limitation, AirLink and the
other Foreign Affiliates) owned by it, by the execution and delivery to the
Creditor of a Quota Pledge Agreement in the form of Exhibit N-1 hereto (the
"COMPANY QUOTA PLEDGE AGREEMENT") and a Voting Agreement
38
in the form of Exhibit X-1(a) hereto (the COMPANY QUOTA VOTING
AGREEMENT") and a Share Pledge Agreement in the form of Exhibit N-2(a)
and Exhibit N-2(b) hereto (the "COMPANY SHARE PLEDGE AGREEMENTS") and a
Voting Agreement in the form of Exhibit X-1(b) hereto (the "COMPANY
SHARE VOTING AGREEMENT") and a Company Promise to Pledge Quotas in the
form of Exhibit N-3 hereto (the "COMPANY PROMISE TO PLEDGE QUOTAS") and
power of attorney related thereto and execution and delivery of all
related documents necessary to give effect thereto; and
(C) Execute and deliver or cause to be executed and
delivered such other agreements, instruments and documents as the Creditor
may reasonably require in order to effect the purposes of the Company
Security Agreement, the Company Quota Pledge Agreement, the Company Promise
to Pledge Quotas, the Company Share Pledge Agreements, the Company Quota
Voting Agreement, the Company Share Voting Agreement, the Company Security
Deposit Agreement, this subsection 6.01(a) and this Agreement including,
but not limited to, the Consents to Assignment.
(b) In order to secure the due payment and performance by each
Stockholder Guarantor of all of the Indebtedness, liabilities and obligations of
such Stockholder Guarantor and the Company to the Creditor, whether now existing
or hereafter arising, whether or not currently contemplated, including, without
limitation, those arising under its Stockholder Guaranty and this Equipment
Financing Agreement, simultaneously with the execution and delivery of this
Agreement, as a condition precedent to the initial Advance, each Stockholder
Guarantor shall have:
(i) Granted to the Creditor a Lien on and pledge with the
Creditor, all of the issued and outstanding shares of the capital stock
of the Company and each of the Foreign Affiliates owned by it, by the
execution and delivery to the Creditor of a Pledge Agreement in the form
of Exhibit O hereto and execution and delivery of all related documents
necessary to give effect thereto (each a "STOCKHOLDER GUARANTOR PLEDGE
AGREEMENT"); and
(ii) Executed and delivered, or cause to be executed and
delivered, such other agreements, instruments and documents as the
Creditor may reasonably require in order to effect the purposes of the
Stockholder Guaranties, the Stockholder Guarantor Pledge Agreements,
this subsection 6.01(b) and this Agreement.
(c) In order to secure the due payment and performance of all of the
Indebtedness, liabilities and obligations of the Company to the Creditor,
whether now existing or hereafter arising, whether or not currently
contemplated, including, without limitation, those arising under this
Equipment Financing Agreement, simultaneously with the execution and delivery
of this Agreement, as a condition precedent to the initial Advance, each of
Telcom and the Telcom Entities shall have:
39
(i) Granted to the Creditor a Lien on and pledge with the Creditor,
all of the issued and outstanding shares of the capital stock of the Company
owned by it, by the execution and delivery to the Creditor of a Pledge
Agreement in the form of Exhibit P hereto and execution and delivery of all
related documents necessary to give effect thereto (the "TELCOM PLEDGE
AGREEMENT"); and
(ii) Executed and delivered, or cause to be executed and delivered,
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Telcom Pledge
Agreement, this subsection 6.01(c) and this Agreement.
(d) In order to secure the due payment and performance by each of
AirFone, AirLink, Via Radio, Via Radio-1 and MCS of all of the Indebtedness,
liabilities and obligations of such Foreign Affiliate and the Company to the
Creditor, whether now existing or hereafter arising, whether or not currently
contemplated, including, without limitation, those arising under its Foreign
Affiliate Guaranty and this Equipment Financing Agreement, simultaneously
with the execution and delivery of this Agreement as a condition precedent to
the initial Advance, each such Foreign Affiliate shall have:
(i) Granted to the Creditor a Lien on all of such Foreign
Affiliate's personal properties and assets (excluding Restricted Assets and
Immaterial Assets), whether now owned or hereinafter acquired, tangible and
intangible, by the execution and delivery to the Creditor of a Pledge
Agreement in the form of Exhibit Q-1 hereto (each a "FOREIGN AFFILIATE
SECURITY AGREEMENT"); and
(ii) Executed and delivered or caused to be executed and delivered
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Foreign Affiliate
Security Agreement, this subsection 6.01(d) and this Agreement including,
but not limited to, the Consents to Assignment (except in respect of Option
Companies).
(e) In order to secure due payment and performance by each of AirFone,
Via Radio, Via Radio-1, MCS and Telemobile-Telecomunicacoes Ltda. of all of
the indebtedness, liabilities and obligations of such Foreign Affiliate and
the Company to the Creditor, whether now existing or hereafter arising,
whether or not currently contemplated, including, without limitation, those
arising under its Foreign Affiliate Guaranty and the Equipment Financing
Agreement, simultaneously with the execution and delivery of this Agreement
as a condition precedent to the initial Advance, each such Foreign Affiliate
shall have:
(i) Granted to the Creditor a Trademark Assignment Agreement in
the form of Exhibit R-2 hereto (each a "FOREIGN AFFILIATE TRADEMARK
ASSIGNMENT AGREEMENT"); and
40
(ii) Executed and delivered or caused to be executed and delivered
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Foreign Affiliate
Trademark Assignment Agreement, this subsection 6.01(e) and this Agreement.
(f) In order to secure the due payment and performance by AirLink, Via
Radio, AirFone Participacao and Xxxxxx Xxxxx of all of the Indebtedness,
liabilities and obligations of such Foreign Affiliate and the Company to the
Creditor, whether now existing or hereafter arising whether or not currently
contemplated, including, without limitation, those arising under its Foreign
Affiliate Guaranty and this Equipment Financing Agreement, simultaneously
with the execution and delivery of this Agreement as a condition precedent to
the initial Advance, each of AirLink, Via Radio, AirFone Participacao and
Xxxxxx Xxxxx shall have in addition to clauses (d) and (e) hereof (as
applicable), shall have:
(i) Granted to the Creditor a Lien on and pledge with the Creditor,
all of the issued and outstanding quotas of the Foreign Affiliates owned by
it, by the execution and delivery to the Creditor of (x) a Foreign Affiliate
Quota Pledge Agreement in the form of Exhibit S-1 hereto and execution and
delivery of all related documents necessary to give effect thereto (each a
"FOREIGN AFFILIATE PLEDGE AGREEMENT") and a Voting Agreement in the form of
Exhibit X-2 hereof (the "FOREIGN AFFILIATE VOTING AGREEMENT") in respect of
AirLink, Via Radio and AirFone Participacao, and (y) a Promise to Pledge
Quotas in the form of Exhibit S-3 hereof (the "XXXXXX XXXXX PROMISE TO
PLEDGE QUOTAS") and powers of attorney related thereto in respect of Xxxxxx
Xxxxx; and
(ii) Executed and delivered, or cause to be executed and delivered,
such other agreements, instruments and documents as the Creditor may
reasonably require in order to effect the purposes of the Foreign Affiliate
Pledge Agreements, the Foreign Affiliate Voting Agreements, the Xxxxxx Xxxxx
Promise to Pledge Quotas, this subsection 6.01(f) and this Agreement.
(g) In order to secure the due payment and performance by AirLink of all
of the Indebtedness and obligations of AirLink and the Company to the
Creditor, whether now existing or hereafter arising, whether or not currently
contemplated, including without limitation, those arising under its Foreign
Affiliate Guaranty and this Equipment Financing Agreement, simultaneously
with the execution and delivery of this Agreement and as a condition
precedent to the initial Advance, AirLink shall have, in addition to
delivering the documents described in clauses (d) and (f) above:
(i) executed and delivered to the Creditor a Security Deposit
Agreement in the form of Exhibit T hereto (the "AIRLINK SECURITY DEPOSIT
AGREEMENT") and an Assignment Agreement of Rights and Obligations in
respect of the Management Agreements in the form of Exhibit Y-1 hereto and
an Assignment of Rights and Obligations in respect of the Conditional Sale
Agreements in the form of Exhibit Y-2
41
hereto (collectively, the "FOREIGN AFFILIATE ASSIGNMENT OF RIGHTS AND
OBLIGATIONS") and a Promise to Pledge Quotas in the form of Exhibit S-4
hereto (the "AIRLINK PROMISE TO PLEDGE QUOTAS"); and
(ii) assigned to the Creditor a Lien on AirLink's leasehold
interest in the real property and improvements constituting the MSO Site by
the execution and delivery to the Creditor of a Lease Assignment Agreement
in the form of Exhibit M-1 hereto (the "AIRLINK LEASE ASSIGNMENT
AGREEMENT"); and
(iii) executed and delivered, or cause to be executed and
deliver, such other agreements, instruments and documents as the Creditor
may reasonably require in order to effect the purpose of the AirLink
Security Deposit Agreement, the AirLink Lease Assignment Agreement, the
Foreign Affiliate Assignment of Rights and Obligations, this subsection
6.01(g) and this Agreement.
SECTION 7. REPRESENTATIONS AND WARRANTIES
Each of the Company and Nextel International makes the representations
and warranties attributed to it, as a Credit Party, in this Section 7 AND
each of the Company and Nextel International makes, on behalf of the Foreign
Affiliates, the representations and warranties attributable to such Foreign
Affiliate, as a Credit Party, in this Section 7. Where a representation and
warranty is not attributed to any particular Credit Party, it shall be deemed
made by and on behalf of the Company, Nextel International and each Foreign
Affiliate as to the Company, Nextel International and each Foreign Affiliate
respectively.
SECTION 7.01 ORGANIZATION.
(a) Each Credit Party is duly organized and validly existing under the
laws of its state or jurisdiction of organization. Schedule 7.01(a) hereto
accurately and completely lists, as to such Credit Party: (i) the state of
incorporation or organization of each such entity, and the type of legal
entity that each of them is, (ii) as to each of them that is a corporation,
the classes and number of authorized and outstanding shares of capital stock
of each such corporation, and the owners of such outstanding shares of
capital stock, (iii) as to each of them that is a legal entity other than a
corporation (but not a natural Person), the type and amount of equity
interests authorized and outstanding of each such entity, and the owners of
such equity interests, and (iv) the business in which each of such entities
is engaged. All of the foregoing shares or other equity interests that are
issued and outstanding have been duly and validly issued and are fully paid
and non-assessable, and are owned by the Persons referred to on Schedule
7.01(a) hereto, free and clear of any Lien except those stock options in
favor of the Company referred to on Schedule 7.01(a) hereto, Permitted Liens
and as otherwise provided for herein. Except as set forth on Schedule 7.01(a)
hereto, there are no outstanding warrants, options, contracts or commitments
of any kind entitling any Person to purchase or otherwise acquire any shares
of capital stock or other equity interests of such Credit Party nor are there
outstanding any
42
securities that are convertible into or exchangeable for any shares of
capital stock or other equity interests of such Credit Party. Except as set
forth on Schedule 7.01(a) hereto, such Credit Party has no Subsidiaries. The
Company has no Subsidiaries other than those listed on Schedule 1.01(b)
hereof and after the Closing Date any additional Subsidiaries to the extent
permitted hereunder.
(b) Each Credit Party is in good standing (to the extent that such
jurisdiction recognizes the legal concept of good standing) in its state or
jurisdiction of organization and in each state or jurisdiction in which it is
qualified to do business. There are no jurisdictions other than as set forth
on Schedule 7.01(b) hereto in which the character of the properties owned or
proposed to be owned by any Credit Party or in which the transaction of the
business of such Credit Party as now conducted or as proposed to be conducted
requires or will require such Credit Party to qualify to do business and as
to which failure so to qualify could reasonably be expected to have a
Material Adverse Effect.
SECTION 7.02 POWER; AUTHORITY.
(a) Each Credit Party has full legal right, power and authority to carry
on its respective present business, to own its respective properties and
assets, to incur the obligations thereunder, to execute and deliver each
Operative Document to which it is a party, and, to the extent it is a party
thereto, to perform and observe the terms and conditions thereof.
(b) All appropriate and necessary corporate, partnership and legal
actions have been taken by each Credit Party to authorize the execution,
delivery and performance of each Operative Document to which it is a party,
and each Credit Party is duly authorized to execute and deliver and to
perform its obligations under each of the Operative Documents to which it is
a party.
SECTION 7.03 GOVERNMENTAL APPROVALS; LICENSES.
(a) All Governmental Approvals that are necessary under all applicable
Governmental Rules in connection with (a) the due execution, delivery and
performance by each Credit Party of its obligations, and the exercise of its
rights, under the Operative Documents, (b) the construction, completion,
ownership, operation and maintenance of the System in the Major Market Areas
(except such Governmental Approvals which are ministerial in nature or which
the failure to obtain such could not reasonably be expected to have a
material adverse effect on the ability of the Company and the Foreign
Affiliates taken as a whole to achieve the Approved Business Plan with
respect to any such Major Market Area), (c) the Telecommunications Business
currently engaged in, and (d) the grant by the Credit Parties of the
assignments and security interests granted by the Security Documents and the
validity and enforceability thereof and for the perfection of and the
exercise by the Creditor of its rights and remedies thereunder are identified
on Schedule 7.03(a) hereto (which Schedule sets forth: the applicant; the
issuing governmental agency (or agencies); the date of application (or, if
not yet applied for, when it
43
will be necessary to obtain such Governmental Approval to achieve the
Approved Business Plan and the date the application is expected to be
submitted); the term of the expected (or granted) approval, and if not yet
granted, when approval is necessary to achieve the Approved Business Plan and
when approval is expected; any appeal periods which are pending; and a brief
description of the matters governed by such approval. All Governmental
Approvals identified on Part I of each of Sections A and B of Schedule
7.03(a) hereto have been duly obtained on or before the Closing Date and are
final, in full force and effect and all administrative appeal periods with
respect thereto have terminated and are all that are necessary to conduct the
business as presently being conducted. Those Governmental Approvals set
forth on Part II of each of ections A and B of Schedule 7.03(a) are expected
to be obtained in due course. There is no proceeding pending or (to the
Company's knowledge after due inquiry) threatened, that could reasonably be
expected to rescind, terminate, modify or suspend any Governmental Approval
listed in Part II of Sections A and B of Schedule 7.03(a) hereto, and no such
disclosed matter could reasonably be expected to have a Material Adverse
Effect. None of Nextel International, the Company and AirLink, respectively,
have any knowledge that the information set forth in each application
submitted by the relevant Credit Party in connection with each such
Governmental Approval is not accurate or complete in all respects as of the
date submitted and as of the Closing Date and true and complete copies of
such Governmental Approvals have been delivered to the Creditor. Except for
those Governmental Approvals set forth on Schedule 7.03(a) hereto and the
Licenses set forth on Schedule 7.03(b) hereto, no other consent, approval or
authorization of, or declaration or filing with, any other Person is required
in connection with (i) the construction, ownership, operation or maintenance
by the Company of the System in the Major Market Areas (except such
Governmental Approvals which are ministerial in nature or which the failure
to obtain such Governmental Approvals or Licenses could not reasonably be
expected to have a material adverse effect on the ability of the Company and
the Foreign Affiliates taken as a whole to achieve the Approved Business Plan
with respect to any such Major Market Area), (ii) the Telecommunications
Business currently engaged in, or (iii) as to such Credit Party and, to the
Company's knowledge after due inquiry, as to Persons affiliated with any
Credit Party, with the execution, delivery, performance, validity or
enforceability of this Agreement or any other Operative Document. Section C
of Schedule 7.03(a) hereto sets forth the Governmental Approvals necessary
for the grant by the Credit Parties of the assignments andsecurity interests
granted by the Security Documents and the validity and enforceability thereof
and for the perfection of and the exercise by the Creditor of its rights and
remedies all of which will be obtained by the registration or filing of the
Security Documents in the locations indicated on Schedule 7.03 hereto.
(b) Schedule 7.03(b) sets forth all Licenses that are necessary for (i)
the ownership, operation or maintenance of the System in the Major Market
Areas (except such Licenses which are ministerial in nature or which the
failure to obtain such License could not reasonably be expected to have a
Material Adverse Effect on the Company and the Foreign Affiliates taken as a
whole to achieve the Approved Business Plan in the Major Market Areas) as is
contemplated by the Approved Business Plan, and (ii) the Telecommunications
Business currently engaged in. Except to the extent expressly set forth in
Schedule 7.03(b) hereof, each such License is in full force and effect.
Those Licenses set forth in Part II of Schedule 7.03(b) hereof are expected
to be obtained in due course. No default has occurred which is continuing
under
44
or in respect of any of the provisions of any License except for defaults
resulting from the failure to meet certain milestones set forth in such
Licenses which failure could not reasonably be expected to have a Material
Adverse Effect. No authorization, approval, application, filing,
registration, consent or other action of any local, state or federal
authority is required to enable the Company or any Foreign Affiliate to
operate under its respective License (except such Licenses which are
ministerial in nature or which the failure to obtain such License could not
reasonably be expected to have a Material Adverse Effect on the Company and
the Foreign Affiliates taken as a whole to achieve the Approved Business Plan
in the Major Market Areas) other than those filings made and referred to on
Schedule 7.03(b) hereto. There is no proceeding pending, or to the knowledge
of the Company after due inquiry, threatened, which could rescind, terminate,
modify or suspend any such approval, filing, registration or consent, and no
such disclosed proceeding could reasonably be expected to have a Material
Adverse Effect. None of Nextel International, the Company and AirLink,
respectively, have any knowledge that theinformation set forth in each
application submitted by the Company and any Foreign Affiliate in connection
with each such approval, filing, registration or consent is not accurate or
complete in any material respect.
SECTION 7.04 EXECUTION, ENFORCEABILITY, VIOLATION OF LAW AND AGREEMENTS.
Each of the Operative Documents to which a Credit Party is a party has
been duly executed and delivered by such Credit Party and constitutes, the
legal, valid and binding contract, agreement and obligation of such Credit
Party enforceable in accordance with its terms except as (w) the
enforceability of a pledge of more than 49% of the ownership interest of an
entity holding a License may require the approval of the Ministry of
Communications and the Company and Nextel International have no reason to
believe such approval will not be granted in due course, (x) the
enforceability thereof may be limited by bankruptcy, insolvency or similar
laws relating or affecting creditors' rights generally, (y) the availability
of equitable remedies, and (z) rights to indemnification and contribution as
they may be limited by public policy; PROVIDED, HOWEVER, that such laws shall
not materially interfere with the practical realization of the benefits of
the Security Documents or the Liens created thereby, except for: (i) possible
delay, (ii) situations that may arise under Chapter 11 of the Bankruptcy
Code, and (iii) equitable orders of the Bankruptcy Court. The execution,
delivery and performance of the terms of each of the Operative Documents by
each Credit Party and the payment by such Credit Party of all amounts due on
the dates and in the currency provided for therein (i) will not, except as is
set forth on Schedule 7.04 hereto, violate or contravene any Governmental
Rule or other provision of law or other governmental directive, whether or
not having the force of law, which is applicable to such Credit Party, which
set forth violation or contravention thereof individually and in the
aggregate could not reasonably be expected to have a Material Adverse Effect;
(ii) will not, except as is set forth on Schedule 7.04 hereto, contravene any
governmental guideline or policy statement applicable to such Credit Party
but not having the force of law, which set forth violation or contravention
thereof individually and in the aggregate could not reasonably be expected to
have a Material Adverse Effect; (iii) will not conflict with, violate or
breach the
45
Articles of Incorporation or By-laws (or any other organizational documents),
as the case may be, of such Credit Party; (iv) will not conflict with or
result in the breach of any provision of, or result in the creation or
imposition of any Lien or other preferential arrangement under, any other
indenture, agreement, mortgage, contract or other undertaking or instrument
to which such Credit Party is a party or by which it or any of its properties
or assets is bound other than the Credit Documents; (v) will not constitute a
default or an event that, with the giving of notice or the passing of time,
or both, would constitute a default under any such agreement or instrument;
and (vi) except for the approvals, consents and registrations described in
subsection 10.01(l) hereof (all those described in clause (i) thereof have
been obtained on or prior to the Initial Funding Date and are and will remain
in full force and effect and no further action is needed with respect
thereto) do not require any governmental consent, registration or approval.
To the extent the representations and warranties contained in this Section
7.04 relate to any law, Governmental Rule, governmental directive or other
matter related to an "employee benefit plan", within the meaning of Section
3(3) of ERISA, or a "plan", within the meaning of Section 4975(e)(1) of the
Code, such representations and warranties are made assuming the truth of the
representation, warranty and covenant contained in the second sentence of
subsection 2.01(a).
SECTION 7.05 FINANCIAL STATEMENTS; BUSINESS PLAN.
(a) The consolidated audited balance sheets of Nextel International and
its subsidiaries and consolidated statements of operations, changes in
stockholders' equity and cash flows of Nextel International and its
subsidiaries each as of December 31, 1996, and all other information and data
heretofore furnished by the Company, Nextel International or any agent of the
Company or Nextel International on behalf of Nextel International to the
Creditor, including the quarterly (each as at March 31, 1997 and June 30,
1997) consolidated balance sheets and consolidated statements of operations,
changes in stockholders' equity and cash flows are complete and correct, have
been prepared in accordance with GAAP and fairly represent the condition and
results of operations of Nextel International and its subsidiaries as of such
dates or for such periods. Since December 31, 1996, no event that could
reasonably be expected to have a Material Adverse Effect has occurred. None
of Nextel International or any of its subsidiaries has contingent
obligations, liabilities for taxes or other outstanding financial obligations
which are material either individually or in the aggregate.
(b) The consolidated audited balance sheets of the Company and its
subsidiaries and consolidated statements of operations, stockholders' equity
and cash flows of the Company and the subsidiaries, each as at December 31,
1996, and all other information and data heretofore furnished by the Company
or any agent of the Company on behalf of the Company to the Creditor,
including the quarterly (each as at March 31, 1997 and June 30, 1997)
consolidated balance sheets and statements of operations, stockholders'
equity and cash flows of the Company and its subsidiaries are complete and
correct, have been prepared in accordance with GAAP and fairly represent the
condition and results of operations of the Company and its subsidiaries as of
such dates or for such periods. Since December 31, 1996, no event that could
reasonably be expected to have a Material Adverse Effect has occurred. None
of the Company or any of its
46
subsidiaries have contingent obligations, liabilities for taxes or other
outstanding financial obligations which are material either individually or
in the aggregate, except as disclosed in the above-referenced financials or
on Schedule 7.05 hereto.
(c) The financial and business projections for the System contained in
the Approved Business Plan submitted to the Creditor were prepared in good
faith and represent the Company's best estimate (as of the date of such
Approved Business Plan) of performance for the forecast period.
SECTION 7.06 TAXES.
Each Credit Party has timely paid all required taxes, duties, fees and
assessments of any kind with respect to, or in connection with, its
respective income, business, properties and certificates of stock and each is
current with all the tax returns required to be filed by it except such
taxes, if any, as are being contested in good faith and by proper proceedings
and as to which either (x) adequate reserves have been established in
accordance with GAAP on the books of such Credit Party or (y) the aggregate
amount of such taxes, duties, fees and assessments is less than $1,000,000
and the non-payment of which could not reasonably be expected to have a
Material Adverse Effect under such circumstances. There are no tax liens
against such Credit Parties or any of their respective properties. Such
Credit Party is not party to any action or proceeding by any Governmental
Authority for the assessment or collection of taxes, nor has any claim for
assessment or collection of taxes been asserted against such Credit Party or
any of its respective properties.
SECTION 7.07 PROPERTIES.
All property and assets owned by each Credit Party, including, without
limitation, contracts, Governmental Approvals currently held by such Credit
Party, entitlements and other rights, titles or interest of such Credit Party
relating or incidental to the System or the Telecommunications Business are
owned by it free and clear of all Liens other than Permitted Liens. Each
Credit Party has good title in and to all of the Collateral, the Immaterial
Assets and the Restricted Assets now owned by it, and with respect to leased
property a valid and subsisting leasehold estate in and to such property, in
each case free and clear of all Liens other than Permitted Liens. No
mortgage or financing statement or other instrument or recordation or
registration covering all or any part of the Collateral, the Immaterial
Assets or the Restricted Assets is on file in any recording office other than
in connection with the Liens granted under the Security Documents. Each
Credit Party has been granted (or reasonably expects to be granted) and has
good leasehold right or title (or reasonably expects to have a good leasehold
right or title) to all easements, rights-of-way, licenses and other real
property rights reasonably required for access to, and construction or
operation of, the System and the Telecommunications Business, free and clear
of any Lien other than Permitted Liens.
47
SECTION 7.08 COMPLIANCE WITH LAWS.
(a) Each Credit Party complies and has complied in all material respects
with all applicable Governmental Rules, and any such non-compliance cannot,
individually or in the aggregate, be reasonably expected to have a Material
Adverse Effect. To the extent the representations and warranties contained
in the preceding sentence relate to any Governmental Rule related to an
"employee benefit plan", within the meaning of Section 3(3) of ERISA, or a
"plan", within the meaning of Section 4975(e)(1) of the Code, such
representations and warranties are made assuming the truth of the
representation, warranty and covenant contained in the second sentence of
subsection 2.01(a). Except as previously disclosed to the Creditor in
writing, no such Credit Party has received any communication of which the
Company has not made the Creditor aware in writing promptly after the Company
becoming aware thereof, from a Governmental Authority that alleges that such
Credit Party is not in full compliance in all material respects with all
applicable Governmental Rules, and to the Company's knowledge, after due
inquiry, there are no circumstances that may prevent or interfere with such
full compliance in all material respects in the future.
(b) Each Credit Party is in compliance in all material respects with all
applicable laws relating to the employment of labor, wages, hours and
conditions of work, collective bargaining, withholding tax and the payment of
social security contributions and other labor-related taxes, and any
non-compliances cannot, individually or in the aggregate, be reasonably
expected to have a Material Adverse Effect. Such Credit Party is not liable
for any arrears in wages, compensation, benefits, premiums, taxes or
penalties for failure to comply with any of the foregoing laws except to the
extent that the same are being contested in good faith and by proper
proceedings and as to which either (x) adequate reserves have been
established in accordance with GAAP on the books of such Credit Party or (y)
non-payment of which could not have a Material Adverse Effect under such
circumstances and could not result in an aggregate liability in excess of
$1,000,000. To the extent the representations and warranties contained in
this Section 7.08(b) relate to any law related to an "employee benefit plan",
within the meaning of Section 3(3) of ERISA, or a "plan", within the meaning
of Section 4975(e)(1) of the Code, such representations and warranties are
made assuming the truth of the representation, warranty and covenant
contained in the second sentence of subsection 2.01(a).
(c) The operations of each Credit Party complies in all material aspects
with all applicable Environmental Laws.
(d) There are no claims, investigations, litigation, administrative
proceedings, whether pending or threatened, or judgments or orders, relating
to any Materials of Environmental Concern or alleging the violation of any
Environmental Laws (collectively "ENVIRONMENTAL MATTERS") relating in any way
to any property or to the operations of such Credit Party.
(e) No Materials of Environmental Concern are presently stored or
otherwise located on, in or under real estate owned or leased by such Credit
Party except in compliance in all material
48
respects with all Environmental Laws, and, no part of such real estate or
adjacent parcels of real estate, including the groundwater located thereon,
is to the knowledge of the Company after due inquiry, presently contaminated
by any Materials of Environmental Concern in any material respect.
(f) Such Credit Party has no material contingent liability in connection
with any release of any Materials of Environmental Concern into the
environment.
SECTION 7.09 INTELLECTUAL PROPERTY.
Each of the Credit Parties owns, or is licensed to use, all trademarks,
tradenames, copyrights, patents and other intellectual property material to
its business (the "INTELLECTUAL PROPERTY"), and the use thereof by the Credit
Parties does not infringe upon the rights of any other Person, expect for any
such infringements that, individually or in the aggregate, could not
reasonably be expected to have a Material Adverse Effect. All material fees
which are due in respect of the Intellectual Property have been paid. All
Intellectual Property owned by such Credit Party, together with any pending
applications therefor is listed on Schedule 7.09 hereto.
SECTION 7.10 BURDENSOME DOCUMENTS; AGREEMENTS WITH AFFILIATES; OTHER
AGREEMENTS.
(a) Except as set forth on Schedule 7.10 hereto, no Credit Party is a
party to or bound by, nor are any of the properties or assets owned by such
Credit Party used in the conduct of its businesses (with respect to Nextel
International only, its Brazilian businesses) affected by, any agreement,
bond, note, indenture, order or judgment, including, without limitation, any
of the foregoing relating to any Environmental Matter, that a violation
thereof could reasonably be expected to have a Material Adverse Effect.
(b) Such Credit Party is not a party to any agreement with any
Arm's-Length Affiliate or any of the officers, directors or stockholders of
such Arm's-Length Affiliate except the Management Agreements, Option
Agreements and agreements made in the ordinary course of business and on arms
length, on commercially reasonable or more advantageous terms; PROVIDED,
FURTHER, that the foregoing representation does not apply to any transaction
entered into by Nextel International with any Affiliate which is an
Arm's-Length Affiliate so long as such transaction could not reasonably be
expected to have a Material Adverse Effect.
(c) Such Credit Party is not a party to nor is any of its respective
property subject to or bound by any lease, forward purchase contract or
futures contract, covenant not to compete, or other agreement which restricts
such Credit Party's ability to conduct its respective business as presently
conducted, or could reasonably be expected to have a Material Adverse Effect.
(d) No material purchase or other commitment (other than pursuant to the
Operative Documents, the Management Agreements, the Intercompany Services
Agreement, dated
49
February 1, 1997 (the "AIRLINK INTERCOMPANY SERVICES AGREEMENT"), between
AirLink and Nextel International and the Intercompany Services Agreement,
intended to be executed between AirLink and Nextel Argentina S.A. in
substantially the form of the AirLink Intercompany Services Agreement) of
such Credit Party is in excess of the normal ordinary and usual requirements
of its respective business, or was made at any price in excess of the then
current market price, or contains terms and conditions more onerous than
those usual and customary in the applicable industry.
SECTION 7.11 SECURITY DOCUMENTS.
The Security Documents create in favor of the Creditor legal, valid and,
upon proper recording, registration or filing for those documents or
instruments that require such filing, registration or recording, and
possession for those security interests perfected by possession, perfected
first security interests in the Collateral other than (i) the Restricted
Assets, and (ii) the Immaterial Assets. All filings, recordations,
registrations and other actions necessary to perfect and protect such
security interests have been duly effected or taken, and a perfected Lien on
the Collateral other than the Restricted Assets and Immaterial Assets, prior
and superior to all other Liens (except for Permitted Liens) has been created
in favor of the Creditor.
SECTION 7.12 JUDGMENTS, ACTIONS, PROCEEDINGS.
Except as set forth on Schedule 7.12 hereto, there are no actions, suits
or proceedings by or before any arbitrator or Governmental Authority pending
against or, to the knowledge of any of the Credit Parties after due inquiry,
threatened against or affecting any of the Credit Parties (i) as to which an
adverse determination could reasonably be expected and that, if adversely
determined, could reasonably be expected, individually or in the aggregate,
to have a Material Adverse Effect or (ii) that involve any of the Operative
Documents or the transactions contemplated thereby nor is there any
reasonable basis for the institution of any such action or proceeding. There
is no proceeding pending, or to the best of the Company's or Nextel
International's knowledge after due inquiry, threatened, which could rescind,
terminate, modify or suspend any License in a Major Market Area which could
reasonably be expected to have a material adverse effect on the ability of
the Company and the Foreign Affiliates to achieve the Approved Business Plan
for such Major Market Area.
SECTION 7.13 NO DEFAULTS.
No Default or Event of Default has occurred and is continuing. No Credit
Party is in default under or with respect to (i) the iDEN Equipment and
Service Agreements or any other System Document or (ii) any other agreement,
lease or instrument to which any Credit Party is a party or by which it or
its properties or assets may be bound which in the case of clause (ii) could
reasonably be expected to have a Material Adverse Effect.
50
SECTION 7.14 STRIKES.
There are no strikes, work stoppages or controversies pending or
threatened between any Credit Party and its employees, other than employee
grievances arising in the ordinary course of business which could not,
individually or in the aggregate, reasonably be expected to have a Material
Adverse Effect.
SECTION 7.15 SUFFICIENCY OF SYSTEM DOCUMENTS.
The services to be performed, the materials to be supplied and the
property interests, easements (if any) and other rights granted to the Credit
Parties pursuant to the System Documents or otherwise anticipated to be
obtained by the Credit Parties in the ordinary course of business:
(i) will comprise all of the property interests necessary to
secure any such right that is material to the construction, operation and
maintenance of the System in the Major Market Areas in accordance with all
Governmental Rules, the Licenses and as contemplated by the Operative
Documents; and
(ii) will provide adequate ingress and egress to the real estate
necessary in connection with the construction and operation of the System
in the Major Market Areas.
There are no services, materials or rights required for the construction,
ownership and operation of the System in the Major Market Areas by the
Company and the Foreign Affiliates in accordance with the Operative Documents
other than (A) those granted by, or to be provided to the Credit Parties
pursuant to, the Operative Documents or (B) those that can be reasonably
expected to be commercially available.
SECTION 7.16 DELIVERY OF SYSTEM DOCUMENTS AND LICENSES.
There has been delivered to the Creditor by Nextel International a true
and complete copy of each System Document (including all exhibits, schedules
and documents referred to therein or delivered pursuant thereto, if any),
each Governmental Approval granted in favor of the Company and each Foreign
Affiliate and each License. Except as identified in the definition
applicable to such System Document, none of the System Documents have been
amended, modified or terminated, and all of the System Documents are in full
force and effect.
SECTION 7.17 ACCURACY OF INFORMATION.
Each of the foregoing representations and warranties attributed to the
Company, Nextel International and each Foreign Affiliate and all information
heretofore furnished by the Company, Nextel International and each Foreign
Affiliate to the Creditor for purposes of or in connection with this
Agreement or any transaction contemplated hereby is, and all such
51
information hereafter furnished by the Company, Nextel International and each
Foreign Affiliate to the Creditor will be, true and accurate in all respects
on the date of this Agreement and as of the date on which such information is
stated or certified; PROVIDED THAT, with respect to projected financial
information, Nextel International and the Company represent only that such
information was prepared in good faith and based upon assumptions believed to
be reasonable at the time. Each of Nextel International, the Company and each
Foreign Affiliate has disclosed to the Creditor in writing any and all facts
which have or could reasonably be expected to have a Material Adverse Effect.
No representation or warranty of Company or Nextel International herein,
and no certification, document or statement furnished or to be furnished to
Creditor contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements of fact contained
herein not misleading.
SECTION 7.18 BUSINESS.
None of the Company or any Foreign Affiliate has (i) on and after
February 1, 1997, conducted any business other than relating to the
development, financing, construction, ownership and maintenance of the System
or the Telecommunications Business, or (ii) prior to February 1, 1997, (to
the Company's or any Majority-Owned Foreign Affiliate's knowledge or
AirLink's knowledge with respect to the Option Companies) conducted any
business which could reasonably be expected to have a Material Adverse Effect
on the Collateral.
SECTION 7.19 SURVIVAL OF REPRESENTATIONS AND WARRANTIES.
Each of the representations and warranties set forth in Section 7 hereof
(subject, in the case of Nextel International, to the provisions of Section
12.11 hereof) shall be deemed repeated on the date of each Advance and on the
first day of each Interest Period as fully as if made on each such date with
respect to the circumstances of the relevant Credit Party existing at such
time, except that the representations and warranties set forth in subsections
7.05(a), (b) and (c) hereof as to the financial statements of the Company and
Nextel International shall be deemed a reference to the audited and unaudited
financial statements of the Company and Nextel International most recently
delivered to the Creditor pursuant to Sections 8.02 and 8.03 hereof.
SECTION 7.20 ERISA.
(a) Each Plan is operated and administered in all material respects
in accordance with applicable laws including, but not limited to, all
material applicable provisions of ERISA and the Code, and each Credit Party
has timely made all requisite premium payments to the PBGC.
(b) No "Reportable Event", as defined in Section 4043, that is
subject to a 30-day notice requirement under Section 4043 of ERISA (E.G., for
which such 30-day notice requirement has not been waived by statute,
regulation or otherwise) in respect of any Plan has
52
occurred, except for any such Reportable Event as could not reasonably be
expected to have a Material Adverse Effect. No Credit Party has received any
notice from the PBGC that any Plan is being involuntarily terminated or from
the Secretary of the Treasury that any partial or full termination of any
Plan has occurred and to the knowledge of the Company, Nextel International
and AirLink, respectively, after due inquiry, no event shall have occurred,
and to the knowledge of the Company, Nextel International and AirLink,
respectively, after due inquiry, there shall exist as of the date hereof no
condition or set of circumstances that present a material risk of the
involuntary termination of any Plan where such termination could reasonably
be expected to have a Material Adverse Effect.
(c) No material unpaid or contingent liability to the PBGC has been
or is expected to be incurred by any Credit Party (other than for payment of
PBGC premiums in the ordinary course) with respect to any Plan. To the
knowledge of the Company, Nextel International and AirLink, respectively,
after due inquiry, no event has occurred and to the knowledge of the Company,
Nextel International and AirLink, respectively, after due inquiry, there
exists no condition or set of circumstances that presents a material risk of
the termination or partial termination of any Plan that could reasonably be
expected result in a material liability on the part of any Credit Party to
the PBGC with respect to any Plan.
(d) No non-exempt "prohibited transaction" as defined in Section
406 of ERISA or Section 4975 of the Code that could reasonably be expected to
have a Material Adverse Effect has occurred with respect to any Plan.
(e) Each Credit Party has made all material required contributions
under the Plans for all periods through and including September 30, 1997, or
adequate accruals therefor have been provided for in the Financial
Statements. No material "accumulated funding deficiency" (as defined in
Section 412 of the Code or Section 302 of ERISA), whether or not waived, has
occurred with respect to any Plan.
(f) The actuarial value of vested benefits required to be funded by
each Credit Party, or with respect to which such Credit Party is liable,
under the Plans, determined using the actuarial methods and assumptions used
by the relevant Plan's actuary as of the last valuation date for which an
actuarial valuation was completed to determine such Plan's funded status, did
not as of the last valuation date as of which an actuarial valuation has been
completed, which in the case of any individual Plan was not earlier than
January 1, 1996, exceed the actuarial value of the assets of the Plans
allocable to such vested and non-vested benefits by a material amount.
(g) No Credit Party is a participating employer in: (i) any Plan
under which more than one unrelated employer makes contributions as described
in Section 4063 and 4064 of ERISA, or (ii) a multiemployer plan as defined in
Section 4001(a)(3) of ERISA.
53
(h) Subject to the first paragraph of Section 7, all references to
a Credit Party in this Section 7.20 or in any other Section of this Agreement
relating to ERISA (other than references relating to the knowledge or
awareness of the Company, Nextel International and AirLink) shall be deemed
to refer to such Credit Party and all other entities that are part of a
Controlled Group as of the relevant date. (a)
SECTION 7.21 REGULATION.
As a result of the Creditor's participation in the transaction
contemplated by this Agreement and the other Credit Documents (but without
consideration of any of the Creditor's other activities), including, without
limitation, the Creditor's execution and delivery of, and performance of its
obligations under, the Credit Documents and enforcement of its rights and
remedies thereunder:
(a) The Creditor will not be subject to regulation under any
Governmental Authority in Brazil.
(b) The Creditor will not be subject to regulation as a "bank" by any
Governmental Authority in the United States of America.
SECTION 7.22 USE OF PROCEEDS.
No part of the proceeds received by any Credit Party from the Advances
will be used directly or indirectly for: (a) any purpose other than as is set
forth in Section 2.08 hereof, or (b) the purpose of purchasing or carrying,
or for payment in full or in part of Indebtedness that was incurred for the
purposes of purchasing or carrying, any margin stock (within the meaning of
Regulation U or X of the Board of Governors of the Federal Reserve System).
SECTION 7.23 INVESTMENT COMPANY.
Neither the Company nor Nextel International is an "Investment Company"
within the meaning of the Investment Company Act of 1935.
SECTION 7.24 CAPITAL CONTRIBUTIONS.
Nextel International has made capital contributions in an amount equal to
$29,708,875 during the period commencing July 1, 1997 through and including
August 31, 1997, as indicated on Exhibit E hereto.
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SECTION 7.25 BANK ACCOUNTS.
Schedule 7.25 hereto is a complete and accurate list of all bank accounts
maintained by the Company and each of the Foreign Affiliates with any bank or
financial institution.
SECTION 7.26 INACTIVE FOREIGN AFFILIATES.
None of the Majority-Owned Foreign Affiliates own assets having a value
in excess of $25,000, other than AirFone, AirLink, Via Radio, Via Radio-1 and
MCS. For purposes of this Section 7.26, value shall be determined by using
the lesser of (x) book value and (y) fair market value.
SECTION 8. AFFIRMATIVE COVENANTS
Until termination of the Commitment and payment in full of the Advances,
any interest due thereon and all other amounts due hereunder, and so long as
this Agreement remains in effect, each Credit Party covenants and agrees that
(PROVIDED that after the Project Completion Date each Shareholder Guarantor
shall be released fully and irrevocably from such covenants and agreements),
unless the Creditor shall otherwise consent in writing, it shall comply in
all respects with each of the following covenants and agreements attributed
to it.
In addition, each of Nextel International and the Company agrees to cause
each Foreign Affiliate to comply in all respects with each covenant and
agreement set forth below and attributed to such Foreign Affiliate.
SECTION 8.01 PERFORMANCE OF OBLIGATIONS.
(a) Each of the Company, Nextel International and the Foreign
Affiliates shall punctually pay all amounts due by it under each of the
Credit Documents at the times, on the dates and in the places specified
therein, and shall timely perform all of its other obligations, undertakings
and covenants under each of the Credit Documents.
(b) Each of Nextel International, the Company and the Foreign
Affiliates shall punctually pay all its respective Indebtedness and shall,
and shall perform all its respective contractual obligations (except those
being diligently contested in good faith by appropriate proceedings) promptly
pursuant to agreements to which it is a party or by which it is bound at all
times during the term of this Agreement.
(c) Each of Nextel International, the Company and the Foreign
Affiliates shall pay and discharge all taxes, assessments and governmental
charges levied upon it or against any of its respective properties or assets
prior to the date after which penalties attach for failure to pay, except for
such taxes, assessments and governmental charges that are being contested in
good faith and so long as such Credit Party has established adequate reserves
therefor on the books
55
of such Credit Party in accordance with GAAP or as to which the aggregate
amount of such taxes, assessments and governmental charges is less than
$100,000 and the nonpayment of which could not reasonably be expected to have
a Material Adverse Effect under the circumstances. Each of Nextel
International, the Company and the Foreign Affiliates shall make timely
filings of all tax returns and material governmental reports required to be
filed or submitted by any of them under any applicable laws or regulations.
If any such Person pays any tax or charge as provided herein or makes any
deductions or withholdings from amounts paid hereunder, the Company or Nextel
International shall promptly forward to the Creditor official receipts or
other evidence acceptable to the Creditor establishing payment of such
amounts.
SECTION 8.02 ANNUAL FINANCIAL STATEMENTS.
(a) As soon as available, but not later than 120 days after the end
of its fiscal year the Company shall deliver to the Creditor a copy of the
consolidated annual financial statements of the Company and its subsidiaries
(including, without limitation, its balance sheet, statement of income,
statement of changes in stockholders' equity and statement of cash flows and
related earnings for such fiscal year with related notes specifying
significant accounting practices and their impact on such financial
statements and with related schedules) as at and for the fiscal year then
ended, audited and certified by Deloitte & Touche LLP or other
internationally recognized independent certified public accountants of
recognized standing selected by the Company, without material exception or
qualification and prepared in accordance, with GAAP. In addition, the
principal financial officer of the Company shall deliver a certificate
stating that at the date of such certificate (i) in respect of Nextel
International, the Company and the Foreign Affiliates, no Default or Event of
Default has occurred and is continuing, or if such Default or an Event of
Default has occurred and is continuing, with a reasonably detailed
description thereof and the actions the Company is taking with respect
thereto, and (ii) there is no litigation, initiated or filed by or against
Nextel International, the Company or the Foreign Affiliates, and, except for
Permitted Liens, no Lien against any of the Collateral has been created,
voluntarily or by operation of law, or if there is any such litigation or
Lien, a description thereof and the actions the Company or any such other
Credit Party, as the case may be, is taking with respect thereto. In
addition, the foregoing certificate shall set forth in reasonable detail the
calculations required to establish that the financial covenants set forth in
Section 8.17 hereof have been complied with. Simultaneously with the
delivery of the foregoing, an Authorized Officer of each of the Company and
the Foreign Affiliaes shall deliver a list of all of the assets of such
Credit Party along with a certificate of an Authorized Officer of such Credit
Party certifying as to the completeness and accuracy thereof. An Authorized
Officer of Nextel International shall provide a list of the shareholdings or
quotaholdings of record of the Company and the Foreign Affiliates. In
addition, each of the Company, the Stockholder Guarantors and the Foreign
Affiliates shall have amended its respective Security Documents as necessary
to cover all personal property and fixtures acquired since the Closing Date
and shall have made all necessary registrations, filings and recordings in
order to create a first priority Lien in favor of the Creditor in such after
acquired property all in accordance with the provisions of the Security
Documents. In addition, simultaneously with the delivery of the financial
statements to the Creditor, each Credit Party
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shall deliver to the Creditor copies of all amendments made to its Security
Documents in respect of after acquired property.
(b) As soon as available, but not later than 120 days after the end
of Nextel International's fiscal year, the Company shall deliver to the
Creditor a copy of the consolidated annual financial statements of Nextel
International, the Company and its subsidiaries including, at least, Nextel
International's, the Company's and its subsidiaries' consolidated balance
sheet, consolidated statement of income, statement of changes in
stockholders' equity and statement of cash flows and retained earnings for
the fiscal year then ended of Nextel International with related notes
specifying significant accounting practices and their impact on such
financial statements and with related schedules as at and for the fiscal year
then ended, audited and certified by Deloitte & Touche LLP or other
internationally recognized independent certified public accountants of
recognized standing selected by Nextel International, without material
exception or qualification and prepared in accordance with GAAP.
SECTION 8.03 QUARTERLY FINANCIAL STATEMENTS.
(a) As soon as available but not later than 60 days after the end
of each fiscal quarter occurring within its fiscal year, the Company shall
deliver to the Creditor a copy of consolidated unaudited financial statements
of the Company and its subsidiaries for such quarterly period (including,
without limitation, its balance sheet, statement of income, statement of
changes in stockholders' equity and statement of cash flows and related
earnings, for such quarter) which shall be certified as having been prepared
in accordance with GAAP by the principal financial officer of the Company.
In addition, the chief financial officer of the Company shall deliver a
certificate stating that at the date of such certificate (i) in respect of
Nextel International, the Company and any Foreign Affiliate, no Default or
Event of Default has occurred and is continuing, or if such Default or an
Event of Default has occurred and is continuing, with a reasonably detailed
description thereof and the actions being undertaken by the Company with
respect thereto, and (ii) there is no litigation, initiated or filed by or
against Nextel International, the Company or any Foreign Affiliate, and
except for Permitted Liens, no Lien against any of the Collateral has been
created, voluntarily or by operation of law, or if there is any such
litigation or Lien, a description thereof and the actions the Company or any
other such Credit Party as the case may be, is taking with respect thereto.
In addition, the foregoing certificate shall set forth in reasonable detail
the calculations required to establish that the financial covenants set forth
in Section 8.17 hereof have been satisfied. In addition, the chief financial
officer of Nextel International shall deliver an updated Invested Capital
Schedule in the form of Exhibit E hereto reflecting updated figures for
acquisition costs, capital expenditures and working capital advances made by
Nextel International or any equity investor on behalf of the Company or any
Majority-Owned Foreign Affiliates and working capital advances made by Nextel
International to the Company or AirLink to the extent permitted hereunder.
In addition such Exhibit E shall identify actual Required Equity Investments
made to date.
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(b) As soon as available but not later than 60 days after the end
of each fiscal quarter occurring within its fiscal year, the Company shall
deliver to the Creditor a copy of consolidated unaudited financial statements
of Nextel International and the subsidiaries for such quarterly period
(including, without limitation, its consolidated balance sheet, consolidated
statement of income, statement of changes in stockholders' equity and
statement of cash flows and related earnings, for such quarter) which shall
be certified as having been prepared in accordance with GAAP by the principal
financial officer of Nextel International.
SECTION 8.04 OTHER INFORMATION.
(a) Promptly upon their becoming available, the Company and Nextel
International shall deliver to the Creditor, copies of all material notices
or material documents given or received by any Credit Party pursuant to any
of the System Documents.
(b) From time to time, the Company and Nextel International shall
deliver to the Creditor, such other information regarding the business of the
Company, Nextel International, the Foreign Affiliates, the System or the
Telecommunications Business as the Creditor may reasonably request.
(c) As soon as available, but, in any event, within forty-five (45)
days after the end of each fiscal quarter of the Company, a copy of a
management report, which shall contain to the extent pertinent for such
period (i) statistical information regarding Subscriber load and number of
Subscribers lost (churn) (including, without limitation, average Subscriber
load for each applicable quarter and Subscriber load as of the end of such
quarter), (ii) revenue per Subscriber and usage (including, without
limitation, dispatch, interconnect and other minutes billed, and basic
charges), (iii) management and marketing fees billed, (iv) the network
installation progress (including, without limitation, cities in Brazil served
by the iDEN network, and a list specifying each License, the channels which
such License controls (and in which cities), any modification to any License,
and the expiration date of such License and the renewal dates as provided by
applicable telecommunications law), and (v) the iDEN network operation
benchmarks (as prepared by the management of the Company) such management
report to be certified by an Authorized Officer of the Company.
(d) The Company shall, no less than ten (10) days in advance of the
beginning of each fiscal year of the Company, adopt and deliver to the
Creditor and the Depositary an Approved Business Plan setting forth in detail
an annual budget for the ensuing year containing at least those items set out
on Schedule 8.04(d) hereto. If for any reason the Company shall not have
adopted an Approved Business Plan for the ensuing year before the beginning
of the fiscal year or fails to deliver such new Approved Business Plan at
least ten (10) days in advance of the beginning of such fiscal year, the
Approved Business Plan for the preceding year shall, until ten (10) days
after delivery of such Approved Business Plan for the ensuing year to the
Creditor and the Depositary, be deemed to be in full force and effect as the
Approved Business Plan. Thereafter (but not more frequently than quarterly
in any calendar year), upon the determination
58
of the Company that the detailed annual budget set forth in the then current
Approved Business Plan is no longer accurate, the Company shall promptly
adopt and deliver to the Creditor an amended Approved Business Plan. Each
such Approved Business Plan shall have attached to it a schedule of quarterly
expenditures for the following major matters: ongoing Operations and
Maintenance Costs, taxes, debt service and capital expenditures not included
in ongoing Operations and Maintenance Costs (the "USE OF FUNDS SCHEDULE").
Each Approved Business Plan shall be accompanied by a statement of the chief
financial officer of the Company to the effect that the items set forth
therein are reasonable estimates for the period covered thereby.
(e) Promptly upon the execution and delivery thereof, copies of all
interconnect agreements with local exchange carriers and long distance
carriers of each city in Brazil in which any Credit Party currently provides,
or in the future will provide, services.
(f) Each of the Company and the Foreign Affiliates shall provide
the Creditor a monthly report summarizing the balance in each of their
respective bank accounts including a description of all deposits and
disbursements therefrom.
(g) From time to time, the Company and Nextel International shall
deliver to OPIC, such information regarding the Conditional Sale Agreements
and the transactions contemplated thereby and such other information
regarding the business of the Company, the Foreign Affiliates, the System or
the Telecommunications Business as OPIC may reasonably request.
SECTION 8.05 ACCESS TO BOOKS; INSPECTIONS.
(a) Each of the Company and Nextel International (with respect to
its Brazilian operations) shall permit the Creditor and OPIC and their
respective representatives, at all reasonable times, but prior to an Event of
Default at the Creditor's or OPIC's (as appropriate) own expense and with
prior written notice to the Company and the relevant other Credit Parties,
and after an Event of Default at the expense of the Company and Nextel
International and each Foreign Affiliate, to inspect the facilities,
activities, books of account and records of the Company and the other Credit
Parties and make copies thereof, and shall cause its representatives,
employees and accountants to give their full cooperation and assistance in
connection with any such visits of inspection or any financial conferences
called by the Creditor or OPIC. The Company shall promptly supply to the
Creditor or OPIC (as appropriate) copies of any reports on its or Nextel
International's (with respect to its Brazilian operations) or any Foreign
Affiliate's business and activities which are publicly distributed, and will
give notice of and make available to the Creditor or OPIC (as appropriate)
copies of any other reports on its or Nextel International's (with respect to
its Brazilian operations) or any Foreign Affiliate activities and reports
made to the government, or any governmental agency or council as the Creditor
or OPIC may from time to time reasonably request. Each of the Company and
Nextel International shall also make available such further information
concerning its, Nextel International's or any other Foreign Affiliate's
business and affairs in Brazil as the Creditor or OPIC may from time to time
reasonably request.
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(b) Each Credit Party shall maintain an adequate accounting system,
including books, accounts and records, prepare all financial statements
required hereunder in accordance with GAAP, consistently applied, and in
compliance with the regulations of any governmental regulatory body having
jurisdiction thereof.
SECTION 8.06 GOVERNMENTAL APPROVALS.
Each of Nextel International, the Company and the Foreign Affiliates
shall promptly from time to time obtain or cause to be obtained all
Governmental Approvals as shall now or hereafter be necessary (i) to import
the equipment pursuant to the Conditional Sale Agreements including, without
limitation, the registration of the Conditional Sale Agreements with the
Brazilian Central Bank and any other registration required by the Brazilian
Central Bank, (ii) for the construction, ownership, completion, operation and
maintenance of the System and the Telecommunications Business and as
contemplated by the System Documents (except where failure to obtain could
not reasonably be expected to have a Material Adverse Effect), and (iii) for
the grant of the assignments and security interests granted by the Security
Documents or the validity and enforceability thereof or for the perfection of
or the exercise by the Creditor of its rights and remedies thereunder. Such
Person shall promptly furnish to the Creditor copies of all such Governmental
Approvals.
SECTION 8.07 INSURANCE.
(a) BUSINESS INSURANCE.
The Company shall (i) maintain or cause to be maintained, to the
extent available on commercially reasonable terms, in full force and effect
at all times on and after the Closing Date and continuing until the Maturity
Date, with responsible insurance companies having a Best Insurance Reports
rating of "A-" or better and a financial size category of "IX" or higher (and
other companies reasonably acceptable to the Creditor) such insurance on such
of its properties, in such amounts and against such risks and with such
deductibles and other terms as is set forth on Schedule 8.07(a) hereto, (ii)
file with the Creditor no more than 7 days after each policy anniversary,
certificates of all insurance then in effect, stating the names of the
insurance companies, the amounts of the insurance, the dates of the
expiration thereof and the properties and risks covered thereby and
specifically listing the special provisions enumerated for such insurance
required by this Section 8.07, and (iii) obtain such additional insurance, to
the extent available on commercially reasonable terms, as the Creditor may
reasonably request to cover risks not foreseen prior to the Closing Date.
The certificates of insurance referred to in clause (ii) hereof shall be
executed by an authorized representative of each insurer. Upon request, the
Company will promptly furnish the Creditor with evidence of such insurance
relating to the System and the Telecommunications Business.
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(b) POLITICAL RISK INSURANCE.
The Company shall maintain or cause to be maintained with OPIC and
AIG (or any other responsible insurance carrier reasonably acceptable to the
Creditor) Political Risk Insurance in the amounts set forth on Schedule
8.07(b) hereto. The Company shall pay all costs and premiums in connection
with the Political Risk Insurance.
SECTION 8.08 CONTINUANCE OF BUSINESS.
Each of Nextel International, the Company and the Foreign Affiliates
shall maintain their respective corporate existence, rights, licenses and
privileges in good standing under and in compliance with all applicable laws
and regulations, except where the failure to do so, individually or in the
aggregate, could not reasonably be expected to have a Material Adverse Effect
and shall maintain, subject to the provisions of Section 9.05 hereof, the
present character of its respective business. Each of the Company and the
Foreign Affiliates shall conduct its respective business substantially within
the scope provided in the Licenses (or as otherwise contemplated in the
Approved Business Plan) and in material compliance with applicable laws and
regulations binding on it or its operations or assets except those laws and
regulations that are being contested in good faith by appropriate proceedings
and as to which such noncompliance could not reasonably be expected to have a
Material Adverse Effect. Nextel International shall conduct its business in
accordance with all applicable laws and regulations binding on it or its
operations or assets except to the extent those laws and regulations are
being contested in good faith by appropriate proceedings and as to which such
noncompliance could not reasonably be expected to have a Material Adverse
Effect.
SECTION 8.09 REQUIRED EQUITY INVESTMENT.
(a) Nextel International shall cause amounts (whether such amounts
are contributed by Nextel International or any other Person (other than the
Company or a Foreign Affiliate) acquiring an equity interest (an "EQUITY
INVESTOR") in the Company or any Foreign Affiliate) which are to be applied
by Nextel International or any other entity other than the Company or a
Foreign Affiliate as equity investments in the Company or any Majority-Owned
Foreign Affiliate as set forth in the then-current Approved Business Plan
(the "REQUIRED EQUITY INVESTMENTS") to be deposited on or prior to the due
date therefor in the AirLink Receipt Account or the U.S. Receipt Account.
(b) On the Initial Funding Date, Nextel International shall have
established reserves on its books to be used solely for investing in the
System ("SYSTEM RESERVES"). The System Reserves on the Closing Date shall
equal $70,291,124.70. The System Reserves may be contributed by Nextel
International, the Company or an Equity Investor. Thereafter, Nextel
International shall maintain at all times System Reserves of no less than the
greater of (i) $70,291,124.70 MINUS all Required Equity Investments made
since the Closing Date in accordance with the then-current Approved Business
Plan, and (ii) an amount equal to the
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Required Equity Investment amount due on or prior to the next succeeding
fiscal quarter in accordance with the then-current Approved Business Plan.
SECTION 8.10 MAINTENANCE AND REPAIRS.
Each of the Company and the Foreign Affiliates shall conduct its
respective business in a manner consistent with prudent industry standards,
keep all its respective material assets and properties in good working order
and condition, and from time to time make all needful and proper repairs,
renewals, replacements and improvements thereof so that the business carried
on in connection therewith may be properly and prudently conducted at all
times.
SECTION 8.11 COMPLIANCE WITH LAW.
(a) Each of Nextel International, the Company and the Foreign
Affiliates shall comply with the requirements of all applicable Governmental
Rules except where the failure to do so could not reasonably be expected to
have a Material Adverse Effect. In particular, and without application of
any materiality standard, each such Person agrees that its activities in
connection with the System and the Telecommunications Business shall be
conducted in full compliance under the United States Foreign Corrupt
Practices Act and any other applicable law dealing with improper or illegal
payments, gifts or gratuities. Promptly upon request, but no later than 15
days after such request, each of the Company and Nextel International shall
provide the Creditor with certification to the effect that neither it nor any
of its Subsidiaries has made any payments, directly or indirectly, in
violation of the foregoing agreement. Notwithstanding the foregoing, the
covenants contained in this Section 8.11 shall not be deemed to have been
violated to the extent any failure to comply with any Governmental Rule or
any other requirement of this Section 8.11 is attributable to a breach of the
representation, warranty or covenant contained in the second sentence of
Section 2.01(a) hereto. Each Credit Party warrants and represents that since
the merger with Wireless it has not taken any action, or failed to take any
action, with respect to the System or the Telecommunications Business if that
act or failure to act would have violated this Section 8.11. Nextel
International and the Company warrant and represent that prior to the merger
with Wireless, Nextel International and the Company conducted reasonable due
diligence of Wireless and its subsidiaries and in connection therewith
nothing came to their attention or led them to believe that the activities of
Wireless or any officers, directors or agents thereof could be construed as
violations of the United States Foreign Corrupt Practices Act of Wireless and
its subsidiaries if they had been whollyowned subsidiaries of Nextel
International at the time of such activities. To the extent the warranties
and representations contained in this Section 8.11(a) relate to any
Governmental Rule, including, but not limited to, the United States Foreign
Corrupt Practices Act, related to an "employee benefit plan", within the
meaning of Section 3(3) of ERISA, or a "plan", within the meaning of Section
4975(e)(1) of the Code, such warranties and representations are made assuming
the truth of the representation, warranty and covenant contained in the
second sentence of Section 2.01(a).
62
(b) Notwithstanding anything in the foregoing paragraph (a) or in
this Agreement to the contrary, the Company and Nextel International shall
keep the System and the assets of the Telecommunications Business free of any
Lien imposed pursuant to any Environmental Law; and will pay or cause to be
paid when due any and all costs in connection with the foregoing (except
where the same are being contested in good faith by proper procedures and as
to which either (x) adequate reserves have been established in accordance
with GAAP on the books of such Person or (y) non-payment of which could not
reasonably be expected to result in liability in excess of $100,000 and could
not reasonably be expected to have a Material Adverse Effect), including
without limitation the cost of identifying the nature and extent of the
presence of any Materials of Environmental Concern in, on or from the System
and the assets of the Telecommunications Business or on any real property
owned or leased by the Company or any Foreign Affiliate or any real property
which is subject to any mortgage securing directly or indirectly all or any
part of the Advances, and the cost of delineation, removal, treatment and
disposal of any such Materials of Environmental Concern. If the Company or
Nextel International fails to do any of the foregoing, then (i) after the
occurrence of an Event of Default related thereto which is continuing under
this Agreement or (ii) in the event the Creditor sustains any liability,
loss, cost, damage or expense (including reasonable attorneys' fees and
expenses) arising out of the presence of Materials of Environmental Concern
in, on or about, or resulting from, the System, the assets of the
Telecommunications Business or the Collateral, the Creditor may cause the
System, the assets of the Telecommunications Business or the Collateral to be
freed (by removal or otherwise) from such Materials of Environmental Concern,
and the cost of such action (including reasonable attorneys', consultants'
and laboratories' fees and expenses) shall be added to the Obligations of the
Company pursuant to this Agreement and secured by the Security Documents.
Nextel International, the Company and each Foreign Affiliate will give to the
Creditor and its agents and employees reasonable access to the System, the
assets of the Telecommunications Business and the Collateral to effect the
foregoing, including, without limitation, following such failure the periodic
conduct of an environmental audit, the cost of such audit to be paid by the
Company, to ensure compliance with this Section 8.11.
(c) None of the Company and the Foreign Affiliates shall use the
System, the Telecommunications Business or any of their real property to
generate, manufacture, refine, produce, treat, store, handle, dispose of,
transfer, process or transport Materials of Environmental Concern other than
in compliance with Environmental Laws.
(d) Each of the Company and the Foreign Affiliates will notify the
Creditor promptly upon its receipt of any notice or advice from any
Governmental Authority or in writing from any other source with respect to
Materials of Environmental Concern on, from or affecting the System or the
Telecommunications Business. Each such Person will also make available for
inspection by the Creditor and its agents and employees, accurate and
complete records of all investigations, studies, sampling and testing
conducted, and any and all remedial actions taken, by the Company and any
Foreign Affiliate or, to the knowledge of and to the extent obtained by, the
Company or Nextel International, any Governmental Authority or other Person
in respect
63
of Materials of Environmental Concern on or affecting the System or the
Telecommunications Business.
(e) Neither the Company nor AirLink shall take any action to
prevent its employees from lawfully exercising their right of free
association and their right to organize and bargain collectively. The
Company and AirLink further agree to observe applicable laws relating to a
minimum age for employment of children, acceptable conditions of work with
respect to minimum wages, hours of work and occupational health and safety,
and not to use forced labor. Additionally, the Company and AirLink agree to
take action to assure that employees shall be permitted to remove themselves
from dangerous work situations without jeopardy to their continued
employment, and that no children under the age of fifteen (15) years of age
will be employed for the System or the Telecommunications Business. The
Company and AirLink are not responsible under this Section 8.11 for the
actions of a government.
SECTION 8.12 NOTICES.
Each of the Company and Nextel International (as applicable) shall
promptly, but in no event later ten (10) Business Days (unless otherwise
indicated below) after the occurrence of the following events, give notice to
the Creditor of the occurrence of any of the following:
(a) a Default or an Event of Default;
(b) a default by Nextel International, the Company or any Foreign
Affiliate under any System Document, together with a statement of action
proposed to be taken by such Credit Party to cure such default;
(c) any (i) written claim, litigation, investigation or proceeding
which arises at any time involving the Licenses in the Major Market Areas;
(ii) written claim, litigation, investigation or proceeding which arises at
any time involving any Credit Party which could reasonably be expected to
have a Material Adverse Effect; (iii) the issuance by any court or
governmental agency or authority of any injunction, order, decision or other
restraint prohibiting, or having the effect of prohibiting, the making of
Advances hereunder, or invalidating, or having the effect of invalidating,
any provision of this Agreement or any of the other Credit Documents,
including but not limited to, provisions regarding the granting of security
interests in the Collateral or the priority of such security interests, or
the initiation of any litigation or similar proceeding seeking any such
injunction, order, decision or other restraint; or (iv) any written challenge
to the Licenses by any third party in the Major Market Areas;
(d) any development in the business or affairs of any of Nextel
International, the Company or any Foreign Affiliate which has resulted in or
could reasonably be expected to result in a Material Adverse Effect;
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(e) thirty (30) days prior written notice thereof, after delivery
from Motorola, the movement of any of the iDEN equipment outside of Brazil;
(f) thirty (30) days prior written notice thereof, the movement of
the Company's, or any Foreign Affiliate's principal place of business to any
location other than as set forth in the Company Security Agreement and any
Foreign Affiliate Security Agreement;
(g) thirty (30) days written notice thereof, any notice received by
any of Nextel International, the Company or any Foreign Affiliate from any
other Governmental Authority regarding events if determined adversely which
could reasonably be expected to have a Material Adverse Effect, including,
without limitation, the rejection, termination or revocation or any License
or Governmental Approval;
(h) any fire, explosion, accident, strike, lockout or other labor
dispute, drought, storm, hail, earthquake, embargo, act of God or of the
public enemy or other casualty (whether or not covered by insurance) or other
event of Force Majeure (as defined under Article 1058, first paragraph of
Brazilian Code) which could reasonably be expected to have a Material Adverse
Effect; and
(i) promptly, upon their becoming available (and the Company and
Nextel International becoming aware of their existence), copies of: (i) all
correspondence with any representative of PBGC, the Secretary of Labor or the
IRS with respect to any Plan, relating to an actual or threatened change or
development that could reasonably be expected to have a Material Adverse
Effect; and (ii) copies of any notices of Plan termination filed by any Plan
Administrator (as those terms are used in ERISA) with the PBGC and of any
notices from the PBGC to the Company with respect to the intent of the PBGC
to institute involuntary termination proceedings where such termination could
reasonably be expected to have a Material Adverse Effect.
Each notice shall be accompanied by a statement of the principal
financial officer of the Company setting forth details of the occurrence
referred to therein and stating what action the Company proposes to take with
respect thereto.
SECTION 8.13 SECURITY; FURTHER ASSURANCES.
(a) Each of Nextel International, the Company and the Foreign
Affiliates shall register or record each of the Credit Documents to which it
is a party (or a copy thereof) required to be registered or recorded and
execute and file and cause to be filed in such offices as shall be required
or appropriate under any applicable Uniform Commercial Code or mortgage
recording or other statute in any state or jurisdiction, and, in each such
case, in such manner and form as the Creditor may reasonably require or as
may be necessary under applicable governmental laws, any financing statement,
registration, mortgage or other instrument that may be necessary, or that the
Creditor may reasonably request, in order to create, perfect, preserve,
validate or satisfy
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the Liens granted to the Creditor pursuant to the Security Documents and
shall pay (except to the extent resulting solely from an act or omission of
the Creditor) all costs, charges and expenses of and incidental to the
registration and recordation of the Credit Documents and the filing or
recording of such financing statements, mortgages or other instruments;
PROVIDED, that the foregoing obligations in this clause (a) shall not apply
with respect to Liens on Immaterial Assets.
(b) To the extent and at such times as real estate is acquired by
any of Nextel International, the Company or any Foreign Affiliate, such
Person shall promptly cause such real estate to be subjected to a Lien in
favor of the Creditor and such Person will execute, deliver and register the
necessary mortgages.
(c) To the extent and at such times as additional easements and
rights-of-way are obtained by any of Nextel International, the Company or any
Foreign Affiliate, such Person shall promptly use good faith and commercially
reasonable efforts to cause such easements and rights-of-way to be subjected
to the Lien of the Security Documents, and such Person will cause the
necessary amendments to be made in respect thereto.
(d) Each of Nextel International, the Company and the Foreign
Affiliates shall at all times and at such Person's cost, warrant and defend
its title in and to the Collateral attributed to it.
(e) To the extent and at such times as Leases are entered into from
and after the Closing Date by any of Nextel International, the Company or any
Foreign Affiliate, such Person shall, to the extent that such Lease may be
assigned (PROVIDED that Nextel International, the Company or such foreign
Affiliate shall have used good faith and commercially reasonable efforts to
allow such Lease to be assigned) execute and deliver a Lease Assignment
Agreement in the form of Exhibit M-2 hereto in respect of such Lease in favor
of the Creditor and register such Lease and the Lease Assignment Agreement.
In connection with the foregoing, Nextel International, the Company or such
Foreign Affiliate (as appropriate) shall cause the proposed language set
forth on Exhibit G hereto to be included in the first draft of all Leases
entered into after the Closing Date and shall use good faith and commercially
reasonable efforts to cause the language to be incorporated in the execution
copies of such Leases.
(f) To the extent and at such times Intellectual Property is
acquired by the Company or any Foreign Affiliate, such Person shall execute
and deliver to the Creditor a trademark assignment agreement in the form of
Exhibit R hereto and register such agreement.
(g) To the extent any Foreign Affiliate owns assets in excess of
$10,000 or conducts any business operation, such Foreign Affiliate shall
execute and deliver a Foreign Affiliate Security Agreement and take all
actions required to create and perfect a first priority lien on the assets of
such Foreign Affiliate, to the extent such Foreign Affiliate had not
previously delivered a Foreign Affiliate Security Agreement.
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(h) To the extent permitted by applicable law and at such times the
Company or any Foreign Affiliate acquires or leases any phone lines after the
date hereof which interconnect with the land lines operated by Telebras, any
other Governmental Authority or other phone company which phone lines are
essential to the phone/interconnect operation of the System, the Company or
such Foreign Affiliate shall cause such phone lines to be subjected to the
Lien of the Security Documents and assign its interest in such interconnect
agreement and such Person will cause the necessary amendments to be made in
respect thereto. Section 8.15 hereof shall apply to all other phone lines
owned or leased by the Company and the Foreign Affiliates.
(i) From time to time and at all time hereafter upon the reasonable
request of the Creditor and (except to the extent are caused solely by a
change in circumstance related to the Creditor) at the cost of the Company,
the Company and Nextel International shall execute and cause to be done and
executed all such acts, deeds and assurances to perfect, preserve or protect
the rights of the Creditor with respect to the Collateral as the Creditor may
reasonably request.
SECTION 8.14 CONSTRUCTION OF THE SYSTEM.
The Company shall proceed diligently to construct the System in (i) Rio
de Janeiro and Sao Paulo as required and permitted pursuant to the Licenses,
and (ii) Belo Horizonte (or such other market area in Brazil) as required and
permitted pursuant to the Licenses but with respect to clause (ii) only to
the extent it is strategically and economically advantageous to do so.
SECTION 8.15 RESTRICTED ASSETS; OPTION COMPANIES.
(a) If during the term of this Agreement it becomes permissible and
commercially practicable in the Creditor's reasonable determination under
applicable Governmental Rule to xxxxx x xxxx on any Restricted Asset, the
Company and Nextel International will, and will cause each Foreign Affiliate
(at their expense), to take all actions required to create and perfect a
first priority lien on such Restricted Assets in favor of the Creditor and
deliver opinions relating to the security interests in such assets in form
and substance satisfactory to the Creditor.
(b) The Company shall, and shall cause Xxxxxx Xxxxx to, comply with
the conditions relating to approvals of the Ministry of Communications set
forth in each Option Agreement so to ensure that the Company and Xxxxxx Xxxxx
acquire the quotas of the Option Companies at the earliest date possible.
The Company shall, and shall cause Xxxxxx Xxxxx to, upon the Ministry of
Communications' approval of the exercise of the Options, pledge all quotas
relating thereto to the Creditor and execute and deliver a Company Quota
Pledge Agreement or Foreign Affiliate Quota Pledge Agreement, as appropriate.
In connection with the foregoing, the Creditor shall have received opinions
of counsel in form and substance satisfactory to it. In addition,
simultaneously with the exercise of the Options, Nextel International and the
Company will, and will cause each Option Company (at their expense), to (i)
take all actions required to create and perfect a first priority lien on the
assets of such Option Company, (ii) execute and deliver a guaranty in the
form of Exhibit J hereto, and (iii) to deliver opinions in respect of the
Foreign
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Affiliate Security Agreement and the Foreign Affiliate Guaranty in form and
substance satisfactory to the Creditor.
SECTION 8.16 MAINTENANCE OF LICENSES.
Except to the extent loss of a License could not reasonably be expected
to have a Material Adverse Effect, each of Nextel International, the Company
and the Foreign Affiliates shall: (i) comply with all the terms and
conditions of the Licenses, preserve and maintain each License in full force
and effect and shall not permit or suffer to exist any default under the
Licenses; (ii) enforce and maintain all of its respective rights under such
Licenses; and (iii) not permit or consent to the modification or waiver of
any provision of the Licenses.
SECTION 8.17 FINANCIAL COVENANTS.
The Company and its Subsidiaries shall have or maintain, on a
consolidated basis, at all times:
(a) a Fixed Charge Coverage Ratio of not less than 1.25:1.00 at the
end of each fiscal quarter of the Company; PROVIDED, HOWEVER, if the
Stockholder Guaranties have not terminated, not less than 1.00:1.00 at the
end of each such fiscal quarter of the Company prior to and including the
fiscal quarter ending December 31, 1999.
(b) a Net Worth of greater than $0 at the end of each fiscal
quarter of the Company.
(c) EBITDA, at the end of each semi-annual period then ended, of
not less than the respective amounts set forth opposite each such date.
EBITDA Prior to EBITDA After
Date Project Completion Date Project Completion Date
---- ----------------------- -----------------------
June 30, 1998 $(10,000,000) $(10,000,000)
December 31, 1998 $(10,000,000) $(10,000,000)
June 30, 1999 $19,000,000 $25,000,000
December 31, 1999 $25,000,000 $33,000,000
June 30, 2000 $40,000,000 $50,000,000
December 31, 2000 $66,000,000 $83,000,000
June 30, 2001 $78,000,000 $90,000,000
December 31, 2001 $96,000,000 $110,000,000
June 30, 2002 and $109,000,000 $125,000,000
thereafter
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(d) minimum Recurring Revenues, as at the end of each semi-annual
period then ended, of not less than the respective amounts set forth opposite
each such date.
DATE RECURRING REVENUES
---- ------------------
June 30, 1998 $10,000,000
December 31, 1998 $30,000,000
June 30, 1999 $40,000,000
December 31, 1999 $100,000,000
June 30, 2000 $130,000,000
December 31, 2000 $165,000,000
June 30, 2001 $180,000,000
December 31, 2001 and thereafter $225,000,000
(e) In addition, in the event that any revised or amended Approved
Business Plan indicates that the covenants set forth this Section 8.17 hereof
will not be satisfied, the Approved Business Plan shall be revised no later
than fifteen (15) days after submission of the Approved Business Plan to the
Creditor such that (i) the covenants set forth in this Section 8.17 are
satisfied or (ii) the Required Equity Investments are increased in amounts as
shall equal to the shortfall of EBITDA for the ensuing year. In calculating
the EBITDA covenant set forth in subsection (c) above for the semi-annual
period immediately following the Required Equity Investment made pursuant to
this subsection (e), such Required Equity Investment may be treated as income
but only to the extent necessary to meet any EBITDA shortfall for such
semi-annual period. In addition, if there is an Event of Default under
subsection (d) above for such semi-annual period after making the Required
Equity Investment pursuant to this subsection (e), the Creditor agrees to
waive such Event of Default for such semi-annual period only.
Notwithstanding the foregoing, (i) the Required Equity Investment shall not
be treated as income for any other calculation of EBITDA under the Credit
Documents including, without limitation, in connection with the ratio of
EBITDA to Consolidated Fixed Charges set forth in the Nextel International
Guaranty, and (ii) the Stockholder Guaranties shall not terminate as long as
increases in the Required Equity Investments are being treated as income and
used to fund shortfalls in EBITDA.
SECTION 8.18 PROPOSED CONSOLIDATION.
The Company shall proceed diligently to achieve the Proposed Consolidation.
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SECTION 8.19 FAILURE TO PERFORM OF STOCKHOLDER GUARANTOR.
If any Stockholder Guarantor (other than Nextel International) shall
fail to perform its obligations under its Stockholder Guaranty, Nextel
International or another Stockholder Guarantor shall assume the liability of
such Stockholder Guarantor under its Stockholder Guaranty no later than five
(5) Business Days after the Creditor notifies Nextel International of such
failure by the Stockholder Guarantor.
SECTION 8.20 ADULT CONTENT.
None of the Company, AirLink and the Foreign Affiliates shall enter into
any arrangement, contractual or otherwise permitting the use of the assets of
the System for the provision of services marketed as telecommunications
offering sexually explicit adult content.
SECTION 8.21 TRANSLATION AND REGISTRATION.
On or prior to the Initial Funding Date, the Company shall, at its
exclusive expense, translate this Agreement into Portuguese and carry out the
registration of this Agreement at the proper register of deeds and documents.
SECTION 8.22 FOREIGN RESIDENT ACCOUNT.
The Company shall, no later than six (6) months after the Closing Date,
establish a non-resident account according to the Brazilian Central Bank
Circular 2677, April 10, 1996 (the "FOREIGN RESIDENT ACCOUNT") for the
benefit of the Creditor and pledge such Foreign Resident Account to the
Creditor. The Company agrees that all amounts deposited in the Foreign
Resident Account shall be immediately transferred to the Creditor.
SECTION 9. NEGATIVE COVENANTS
Until the termination of the Commitment and payment in full of the
Advances, any interest due thereon and all other amounts due hereunder, and
so long as this Agreement remains in effect, each Signatory Credit Party
covenants and agrees that (provided that after the Project Completion Date,
Nextel International and each other Stockholder Guarantor shall be fully and
irrevocably released from such covenants and agreements) unless the Creditor
shall otherwise consent to it in writing, it shall comply in all respects
with each of the following covenants and agreements attributed to it. In
addition, each of Nextel International and the Company agrees to cause each
Foreign Affiliate to comply in all respects with each covenant and agreement
set forth below and attributed to such Foreign Affiliate.
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SECTION 9.01 INDEBTEDNESS.
None of the Company or any Foreign Affiliate shall, at any time, incur,
create, assume or suffer to exist any Indebtedness (howsoever incurred,
created, assumed or existing, directly or indirectly) other than Permitted
Indebtedness.
SECTION 9.02 GUARANTIES.
None of the Company or any Foreign Affiliate shall assume, endorse, be
or become liable for, or guarantee, the obligations of any Person (other than
the Foreign Affiliate Guaranties), except (i) by the endorsement of
negotiable instruments for deposit or collection in the ordinary course of
business, and (ii) in respect of the Permitted Indebtedness of the Company
and the Majority-Owned Foreign Affiliates. For the purposes hereof, the term
"guarantee" shall include any agreement, whether such agreement is on a
contingency or otherwise, to purchase, repurchase or otherwise acquire
Indebtedness of any other Person, or to purchase, sell or lease, as lessee or
lessor, property or services, in any such case primarily for the purpose of
enabling another Person to make payment of Indebtedness, or to make any
payment (whether as an advance, capital contribution, purchase of any equity
interest or otherwise) to assure a minimum equity, asset base, working
capital or other balance sheet or financial condition, in connection with the
Indebtedness of another Person, or to supply funds to or in any manner invest
in another Person in connection with such Person's Indebtedness.
SECTION 9.03 TRANSFER.
None of the Company or any Foreign Affiliate shall, without the prior
written consent of the Creditor, sell, lease, transfer, assign or otherwise
dispose of (whether in one transaction or in a series of related
transactions) all or any material part of its assets (except (x) in the
ordinary course of business, and (y) if the value of the asset is less than
1% of the total assets of the Company and its subsidiaries as listed on the
most recent balance sheet delivered in accordance with subsections 8.02(a) or
8.03(a) hereof, as the case may be, or the aggregate value of assets disposed
of in any year does not exceed 5% of the total assets of the Company and its
subsidiaries as listed on the most recent balance sheet delivered in
accordance with subsections 8.02(a) and 8.03(a) hereof, as the case may be,
or such disposition is for the replacement of obsolete, worn or defective
equipment for which such Credit Party shall have received adequate and fair
consideration), whether now owned or hereafter acquired.
SECTION 9.04 LIENS.
None of the Company, Nextel International or any Foreign Affiliate shall
create or suffer to exist any Lien upon or with respect to any of such Credit
Party's assets constituting the Collateral or the Restricted Assets, whether
now owned or hereafter acquired other than Permitted Liens.
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SECTION 9.05 MERGERS; ACQUISITIONS.
(a) None of the Company or any Foreign Affiliate shall merge or
consolidate with any Person (whether or not such Credit Party is the
surviving entity), or, except as permitted by Section 9.12 hereof, acquire
all or substantially all of the assets of any of the capital stock or the
partnership interests of any Person, EXCEPT that such Credit Parties may
consummate the Proposed Consolidation provided that simultaneously therewith:
(i) the consummation thereof could not reasonably be expected to
have a Material Adverse Effect upon the Credit Parties affected thereby
considered as a whole;
(ii) (x) after consummation thereof the surviving Credit Party or
Parties and the Consolidated Entity shall be in compliance with all
Governmental Rules and (y) the consummation thereof shall have no adverse
effect upon (1) the Collateral, the Foreign Affiliate Guaranties or the
Stockholder Guaranties or the Creditor's rights therein, and (2) all
Governmental Rules relating to the Proposed Consolidation shall be in full
force and effect and administratively non-appealable and the Credit Parties
shall have delivered to the Creditor a clean opinion to such effects of
counsel selected by them and reasonably acceptable to the Creditor; and
(iii) this Agreement and the other Credit Documents shall
have been amended, in form and substance reasonably acceptable to the
Creditor, to preserve the Creditor's rights hereunder and in the
Collateral.
(b) In addition, Nextel International shall not merge or consolidate
with any Person unless (i) at the time thereof, and after giving effect
thereto, no Default shall have occurred and be continuing, (ii) either (x)
Nextel International shall be the continuing and surviving entity or (y) the
continuing or surviving entity shall have assumed all of the obligations of
Nextel International hereunder and under the Nextel International Guaranty
and the other Credit Documents pursuant to an instrument in form and
substance satisfactory to the Creditor and delivered such proof of corporate
action, incumbency of officers, opinions of counsel and other documents, as
is consistent with those delivered pursuant to Section 10.01 hereto, on the
Initial Funding Date or as the Creditor may request, and (iii) the Net Worth
(determined on a consolidated basis in accordance with GAAP) of the
continuing or surviving entity immediately after giving effect thereto shall
be greater than or equal to the Net Worth of Nextel International prior to
giving effect thereto.
SECTION 9.06 DISTRIBUTIONS; REDEMPTIONS.
(a) None of the Company or any Foreign Affiliate shall declare or pay
any dividends or make any distribution of any kind on such Credit Party's
outstanding stock, or set aside any sum for such purposes (all of the
foregoing, "DISTRIBUTIONS"), except that AirLink may declare or pay a
dividend in favor of its shareholders so long as the aggregate amount of such
dividend
72
is transferred directly to the U.S. Receipt Account and is subject to the
provisions of the Company Security Deposit Agreement.
(b) None of the Company or any Foreign Affiliate shall purchase,
redeem, retire or otherwise acquire, directly or indirectly, or make any
sinking fund payment with respect to, any shares of any class of stock of any
Credit Party now or hereafter outstanding or set apart any sum for any such
purpose, other than the repurchase or redemption by the Company of its Class
B Common Stock pursuant to the Second paragraph of the Restated Articles of
Incorporation of the Company as such provision exists of the date hereof (the
"CLASS B REDEMPTION"); PROVIDED, THAT, (i) in the event that the Company
becomes so obligated to repurchase or redeem such Class B Common Stock, the
Company shall promptly notify the Creditor of its receipt of a request of
redemption from any holder of Class B Common Stock of the Company, (ii) prior
to such Class B Redemption, Nextel International shall contribute additional
equity in an amount equal to the redemption price of such shares being
redeemed pursuant to the Class B Redemption and additional amounts necessary
to maintain the financial covenants of the Company set forth in Section 8.17
hereof and the Company shall cause such amounts to be deposited in the U.S.
Receipt Account, and (iii) no Default exists or shall occur as a result of
the Class B Redemption. Nextel International's obligations in this
subsection 9.06(b) shall survive until all of the Obligations hereunder and
the other Credit Documents have been satisfied and this Agreement has
terminated.
SECTION 9.07 STOCK ISSUANCE.
None of the Company or any Foreign Affiliate shall issue any additional
shares or any right or option to acquire any shares, or any security
convertible into any shares, of the capital stock of any Credit Party UNLESS
such options and such shares, upon issuance, become pledged to the Creditor
and subject to the other agreements referred to herein to which the existing
shares of such Credit Party are subject prior to such issuance, and PROVIDED
THAT, in any event, after (or as a result of) any such issuance there shall
not have occurred any Event of Default of the type referred to in subsections
11.01(w), (x) and (y) hereof.
SECTION 9.08 AMENDMENT OF DOCUMENTS AND ORGANIZATION.
(a) None of the Company or any Foreign Affiliate shall (i) amend, waive
or modify, or agree to any amendment, waiver, supplement or modification of,
or fail to perform its Obligations under any System Document to which it is a
party or any other agreement, contract or instrument, the result of which
could reasonably be expected to have a Material Adverse Effect, (ii) cancel
or terminate, or agree to any cancellation, termination or assignment of, any
such System Document the cancellation or termination of which could
reasonably be expected to have a Material Adverse Effect, or grant consents
with respect to any material obligation thereunder, (iii) exercise any
options or remedies or make any elections under any such System Document
which exercise or election could reasonably be expected to have a Material
Adverse Effect, (iv) fail to exercise promptly and diligently each and every
material right which it may
73
have under a System Document (other than any right of termination) the result
of which could reasonably be expected to have a Material Adverse Effect, or
(v) enter into any Additional System Documents unless (x) such Additional
System Document is in connection with the ordinary and routine furnishing of
goods or services to the System or the Telecommunications Business, or (y)
such Additional System Document is provided for in the Approved Business
Plan, or (z) the dollar value of work to be performed pursuant to such
Additional System Document does not exceed $1,000,000 in any calendar year
and the aggregate dollar value of work to be performed pursuant to all
Additional System Documents shall not exceed $10,000,000 in any calendar
year. The Company and the Foreign Affiliates shall promptly furnish to the
Creditor true and correct copies of all material amendments, modifications,
waivers, options, elections and with respect to the System Documents.
(b) None of Nextel International, the Company or any Foreign Affiliate
shall amend, supplement, or otherwise modify or waive compliance with any of
the provisions of its respective articles of incorporation or by-laws or
shareholders agreement (or any other constitutive documents) except for
amendments, supplements, modifications or waivers that could not reasonably
be expected to have a Material Adverse Effect or could not otherwise
materially and adversely affect the Company's or any such other Credit
Party's ability to perform its obligations under the Credit Documents.
SECTION 9.09 LOANS; ADVANCES.
None of the Company or any Foreign Affiliate shall make any guarantee,
loan or advance to any Person except as follows:
(a) guarantees to the extent permitted by Section 9.02 hereof;
(b) loans or advances to the extent permitted by Section 9.12 hereof;
(c) Permitted Investments;
(d) loans or advances among or between the Company and the
Majority-Owned Foreign Affiliates; and
(e) additional guarantees, loans or advances, in an aggregate amount
outstanding at any time not in excess of $1,000,000.
(f) loans or advances to the extent permitted by subsection 2.05(e)
hereof.
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SECTION 9.10 USE OF FUNDS.
The Company and the Foreign Affiliates shall not make expenditures which
are not contemplated by the then current Approved Business Plan; PROVIDED,
THAT, within any monthly period, the Company and the Foreign Affiliates may
make expenditures for ongoing operations and maintenance so long as the
aggregate amount set forth for such quarter in such Schedule for the then
current fiscal year of the Company is not exceeded.
SECTION 9.11 TRANSACTIONS WITH AFFILIATES.
None of the Company, Nextel International or any Foreign Affiliate shall
except for the transactions contemplated by the Conditional Sale Agreements
and the Management Agreements and except as expressly permitted by the Credit
Documents, transfer, sell, assign or otherwise dispose of, directly or
indirectly, any Collateral or other assets to any Affiliate other than a
Majority-Owned Foreign Affiliate (any such Affiliate, an "ARM'S-LENGTH
AFFILIATE"), or enter into any transaction directly or indirectly with or for
the benefit of any Arm's-Length Affiliate; PROVIDED, that the Company or any
other Foreign Affiliate may enter into transactions with an Arm's-Length
Affiliate so long as the monetary or business consideration arising therefrom
would be as advantageous to the Company or Foreign Affiliate as the monetary
or business consideration which the Company or Foreign Affiliate would obtain
in a comparable arm's length transaction with a Person not an Affiliate;
PROVIDED, FURTHER, that the restrictions of this Section 9.11 shall not apply
to any transaction entered into by Nextel International with any Affiliate
which is not a Credit Party so long as such transaction could not reasonably
be expected to have a Material Adverse Effect on Nextel International.
SECTION 9.12 CHANGES IN BUSINESS.
(a) None of the Company or any Foreign Affiliate shall enter into or
engage in any business other than the ownership and operation of the System;
PROVIDED THAT, such Persons may (x) continue to engage in a
Telecommunications Business in which it is engaged on the Closing Date and
(y) enter into or engage in a Telecommunications Business (including by way
of purchase of assets or stock, by merger or consolidation) other than
ownership and operation of the System if with respect to a new
Telecommunications Business:
(i) the entering into thereof could not reasonably be expected
to have a Material Adverse Effect;
(ii) all property associated with such business (including stock
of any new companies owned wholly or in part by any such Credit Party)
shall, to the maximum extent permitted by law, become part of the
Collateral and the Company and the Foreign Affiliates shall take all
required actions required by the Creditor in accordance with Section 8.13
hereof; and
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(iii) the Credit Documents shall be amended simultaneously with the
entering into of such business to accomplish the matters referred to in
the foregoing clause (ii) and to add any new "Credit Parties".
(b) None of the Company and the Foreign Affiliates shall (i) make any
material change in its business or the System in the Major Market Areas, or
(ii) wind-up or liquidate or dissolve itself (or suffer any liquidation or
dissolution) or discontinue its business, except (x) with respect to a
Foreign Affiliate, the winding-up, liquidation or dissolution of which could
not reasonably be expected to have a Material Adverse Effect and (y) pursuant
to the Proposed Consolidation.
SECTION 9.13 PREPAYMENTS.
None of the Company or any Foreign Affiliate shall make any voluntary or
optional prepayment of any Indebtedness for borrowed money incurred or
permitted to exist under the terms of this Agreement, other than the
Indebtedness evidenced by the Financing Note.
Notwithstanding the foregoing, the Company or any Foreign Affiliate may
make prepayments of Indebtedness incurred or permitted to exist hereunder in
accordance with the provisions of the Company Security Deposit Agreement and
the AirLink Security Deposit Agreement.
SECTION 9.14 ADDITIONAL SYSTEM DOCUMENTS.
No Credit Party (other than Option Companies) shall enter into any
Additional System Document unless in connection therewith, the relevant
Credit Party or Parties shall have delivered a Consent to Assignment
substantially in the form of Exhibit B hereto.
SECTION 9.15 ERISA OBLIGATIONS.
No Credit Party shall do, agree to do, or permit to be done, any of the
following with respect to any Plan:
(a) be or become obligated to the PBGC in excess of $1,000,000 other
than in respect of timely paid annual premium payments; and
(b) be or become obligated to the IRS or the Secretary of Labor in
excess of $1,000,000 with respect to excise taxes or other penalties provided
for in Sections 4971 through 4980B of the Code or Section 502 of ERISA.
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SECTION 9.16 SALE AND LEASEBACK TRANSACTIONS.
None of the Company or any Foreign Affiliate shall, directly or
indirectly, enter into any sale and leaseback transaction or any other
arrangement with any Person providing for any such Credit Party to lease or
rent property that any such Credit Party has sold or will sell or otherwise
transfer to such Person.
SECTION 9.17 NEW SUBSIDIARIES.
None of the Company or any Foreign Affiliate shall, directly or
indirectly, organize, create, acquire or permit to exist any Subsidiary other
than those Subsidiaries in existence on the Closing Date and listed on
Schedule 7.01(a) hereof and those Subsidiaries permitted by Section 9.05 and
subsection 9.12(a) hereof.
SECTION 9.18 RESTRICTED ASSETS AND OPTION COMPANIES.
Subject to Section 8.15 hereof, none of the Company or any Foreign
Affiliate shall grant any Lien upon any Restricted Assets or pledge the
quotas in the Option Companies to anyone other than the Creditor.
SECTION 9.19 BANK ACCOUNTS.
The Company and AirLink shall not create or have any bank accounts other
than those listed on Schedule 7.25 hereto unless the Company or AirLink (as
appropriate) gives prior notice of its intent to open such bank account and
the balance of such accounts are transferred monthly to the U.S. Receipt
Account or the AirLink Receipt Account (as appropriate). In addition, the
other Foreign Affiliates shall not create or have any bank accounts other
than those listed on Schedule 7.25 hereto unless either (i) such additional
bank account shall be subject to a security deposit agreement in form
satisfactory to the Creditor or (ii) all funds deposited in such additional
bank account shall be transferred directly to the AirLink Receipt Account or
the U.S. Receipt Account on a monthly basis.
SECTION 9.20 BANKRUPTCY.
Subject to Section 12.11 hereof, neither the Company nor any Foreign
Affiliate shall file a petition for bankruptcy. Each of the Company and
Nextel International shall cure any event which may trigger an Event of
Default under subsections 11.01(l), (m) and (n) hereto.
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SECTION 10. CONDITIONS PRECEDENT
SECTION 10.01 CONDITIONS TO INITIAL ADVANCE.
The obligations of the Creditor to make its initial Advance hereunder
shall be subject to the fulfillment of the following conditions precedent to
the satisfaction of the Creditor on or prior to the earlier of (i) November
21, 1997, and (ii) the date of the initial Advance:
(a) The Creditor shall have received copies of each System Document
(other than any Additional System Document) duly executed and delivered by
each of the parties thereto, each certified by the Company to be true,
complete, in full force and effect and that no defaults exist thereunder and
executed copies of the Consents to Assignment in respect of each System
Document other than the System Documents in respect of the Option Companies
and the lease for the MSO Site.
(b) Intentionally omitted.
(c) All representations and warranties of the Credit Paries in Section
7 hereof shall be true and correct as of the date made and as of the date of
the initial Advance (except to the extent they relate to an earlier date in
which case such representations and warranties shall be true as of such date).
(d) Company Documents.
(i) The Company shall have executed and delivered to the
Creditor this Agreement, the Company Security Deposit Agreement, the
Financing Note and the Conditional Sale Agreements.
(ii) The Company shall have:
(A) executed and delivered to the Creditor the Company
Security Agreement;
(B) acknowledgment copies of UCC-1 Financing Statements
necessary to perfect a first priority security interest and evidence
thereof;
(C) delivered to the Creditor: (1) copies of, or certificates
of the issuing companies with respect to, policies of insurance owned by
the Company complying with the provisions of Section 8.07 hereof, together
with endorsements thereto that comply with the terms of the Company
Security Agreement naming the Creditor (where applicable), in its capacity
as such, as additional insured as its interests may appear; (2) evidence
of the Company's liability insurance policies, and (3) evidence that such
insurance is in full force and effect;
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(D) executed and delivered to the Creditor the Company
Quota Pledge Agreement, the Company Quota Voting Agreement, the Amendment
to the Company Quota Pledge Agreement in the form of Exhibit N-4 hereto,
the Company Share Pledge Agreements together with the certificates
evidencing the capital stock pledged by it accompanied by stock powers
endorsed in blank and irrevocable proxies relating thereto, the Company
Share Voting Agreement, the Amendment to the Company Share Pledge
Agreement in the form of Exhibit N-5 hereto, the Company Promise to
Pledge Quotas and shall have duly complied with all of the terms and
conditions thereof;
(E) endorsed the Conditional Sale Notes in favor of the
Creditor; and
(F) otherwise duly complied with all of the terms and
conditions of the Security Documents to be executed by it.
(e) Stockholder Guarantor Documents.
Each Stockholder Guarantor shall have:
(i) executed and delivered to the Creditor its respective
Stockholder Guaranty;
(ii) executed and delivered to the Creditor its Stockholder
Guarantor Pledge Agreement together with the certificates evidencing the
capital stock pledged by it accompanied by stock powers endorsed in blank
and irrevocable proxies relating thereto, and shall have duly complied
with all of the terms and conditions thereof; and
(iii) otherwise duly complied with all of the terms and conditions
of the Security Documents to be executed by it.
(f) Telcom Documents.
Each of Telcom and the Telcom Entities shall have:
(i) executed and delivered to the Creditor the Telcom Pledge
Agreement together with the certificates evidencing the capital stock
pledged by it accompanied by stock powers endorsed in blank and irrevocable
proxies relating thereto, and shall have duly complied with all of the
terms and conditions thereof; and
(ii) otherwise duly complied with all of the terms and conditions
of the Security Documents to be executed by it.
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(g) AirLink Documents.
AirLink shall have:
(i) executed and delivered the AirLink Security Deposit
Agreement, the AirLink Lease Assignment Agreement, the AirLink Promise to
Pledge Quotas, the Foreign Affiliate Assignment of Rights and Obligations
and the other documents referred to in subsection (h) below;
(ii) executed and delivered the Conditional Sale Agreements each
which shall be in substantially the form of Exhibit U hereto;
(iii) made all registrations applicable under Brazilian law
including the registration of the Conditional Sale Agreements required by
the Brazilian Central Bank and those registrations necessary to perfect a
first priority security interest and evidence thereof;
(iv) paid documentary taxes and registration fees which may be
payable on the Security Documents attributed to it under the Central Bank
registration; and
(v) otherwise duly complied with all of the terms and conditions
of the Security Documents to be executed by it.
(h) Majority-Owned Foreign Affiliate and MCS Documents.
Each of the Majority-Owned Foreign Affiliates and MCS (except as
otherwise provided below) shall have:
(i) executed and delivered to the Creditor its Foreign Affiliate
Guaranty;
(ii) each of AirLink, AirFone, Via Radio, Via Radio-1 and MCS
shall have executed and delivered to the Creditor its Foreign Affiliate
Security Agreement, the Amendment to its Foreign Affiliate Security
Agreement in the form of Exhibit Q-2 hereto and (other than AirLink) the
Foreign Affiliate Trademark Assignment Agreement;
(iii) made all registrations under Brazilian law including
those necessary to perfect a first priority security interest in so much of
the Collateral as is attributed to such Foreign Affiliate and evidence
thereof;
(iv) paid documentary taxes and registration fees which may be
payable on the Security Documents attributed to such Foreign Affiliates;
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(v) delivered to the Creditor: (A) copies of, or certificates of
the issuing companies with respect to, policies of insurance owned by such
Foreign Affiliate complying with the provisions of Section 8.07 hereof,
together with endorsements thereto that comply with the terms of such
Foreign Affiliate Security Agreement naming the Creditor (where
applicable), in its capacity as such, as additional insured as its
interests may appear; and (B) evidence that such insurance is in full force
and effect, and (C) certificates and summaries of such Foreign Affiliate's
liability insurance policies;
(vi) (A) with respect to AirLink, Via Radio and AirFone
Participacao, executed and delivered to the Creditor the Foreign Affiliate
Quota Pledge Agreement, the Amendment to the Foreign Affiliate Quota Pledge
Agreement in the form of Exhibit S-3 hereto, together with the Foreign
Affiliate Voting Agreements, and shall have duly complied with all of the
terms and conditions thereof, and (B) with respect to Xxxxxx Xxxxx,
executed and delivered to the Creditor the Xxxxxx Xxxxx Promise to Pledge
Quotas and shall have duly complied with the terms and conditions thereof;
and
(vii) otherwise duly complied with all of the terms and conditions
of the Security Documents to be executed by it.
(i) The Creditor shall have received the following documents:
(i) with respect to each Credit Party, copies, certified by an
Authorized Officer of such Credit Party, of the Articles of Incorporation
(including amendments thereto reflecting the pledge of stock or quotas and
exercise of the Options) and By-Laws of such Person (or other
organizational documents), each as amended to date, along with evidence
with respect to such Person establishing the existence and good standing
(where applicable) of such Person;
(ii) certificates of an Authorized Officer of each Credit Party
certifying (i) the resolutions of the Board of Directors or other governing
body of such Person or other action of such Person authorizing the
execution, delivery and performance of the Credit Documents to which it is
a party and, with respect to the Company, the iDEN Equipment and Service
Agreements and the other System Documents, and (ii) the authority, name,
title and specimen signature of each individual authorized to execute any
of the Credit Documents to which it is a party and, with respect to the
Company, the iDEN Equipment and Service Agreements, and any other documents
in relation thereto on behalf of such Person and to bind such Person
thereby;
(iii) a copy of the Company's and Nextel International's most
recent audited and unaudited financial statements in conformity with
Sections 8.02 and 8.03 hereof;
(iv) copies, certified by the Corporate Secretary of the Company
of each Governmental Approval necessary or advisable in connection with the
execution,
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delivery, performance or enforceability of each of the Credit Documents
and the iDEN Equipment and Service Agreements and the other System
Documents, together with any application with respect thereto;
(v) the opinion of Brazilian counsel to each Credit Party and
the opinion of special United States counsel to the Company and each other
Credit Party, each dated the Initial Funding Date and addressed to the
Creditor, in the form attached hereto as Exhibits V-1 and V-2,
respectively;
(vi) the opinion of Xxx Xxxxxxx, counsel to Telcom, dated the
Initial Funding Date and addressed to the Creditor in form and substance
satisfactory to the Creditor in its sole discretion;
(vii) the opinion of Fenwick & West LLP, counsel to Xxxxxxxx
Xxxxx, Xxxxx Xxxxx, Xxxxx Xxx Xxxxx Educational Trust, Samir Xxx Xxxxx
Educational Trust and Xxxxxx Xxxxx, dated the Initial Funding Date and
addressed to the Creditor in form and substance satisfactory to the
Creditor in its sole discretion;
(viii) the opinion of Xxxxx-Xxxxxx, Raworth & XxXxxxxx,
counsel to South Beach Ventures, Inc., dated the Initial Funding Date and
addressed to the Creditor in form and substance satisfactory to the
Creditor in its sole discretion;
(ix) the opinion of Xxxxx-Xxxxxx, Raworth and XxXxxxxx, special
counsel to Xxxxxx Xxxxx and Art Consult, dated the Initial Funding Date and
addressed to the Creditor in form and substance satisfactory to the
Creditor in its sole discretion; and
(x) the opinion of Heng-Pin Kiang, General Counsel of Nextel
International and the Company, dated the Initial Funding Date and addressed
to the Creditor in form and substance satisfactory to the Creditor in its
sole discretion.
(j) Nextel International shall have established reserves on its books
in an amount equal to $70,291,124.70 to be used solely for investing in the
System and an Authorized Officer of Nextel International shall certify as to the
foregoing.
(k) The Creditor shall have received the Approved Business Plan of
the Company.
(l) The Creditor shall have received (i) a copy of each Governmental
Approval set forth on Part I of Schedule 7.03(a) hereto and each License
referred to in Schedule 7.03(b) hereto, certified by an Authorized Officer of
the Company to be true, complete, in full force and effect, and administratively
non-appealable as of such date, and an opinion of counsel selected by the
Company and acceptable to the Creditor confirming the matters referred to in
Section 7.03 hereof, together with (ii) a copy of each application referred to
on Part II of Schedule 7.03(a) hereof which has been submitted to any
Governmental Authority.
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(m) Certificate of an Authorized Officer certifying that the Company
has obtained, or will obtain in due course when needed, all easements, licenses,
rights-of-way and any other rights expected to be necessary for the construction
and operation of the System in the Major Market Areas.
(n) All fees payable in connection with the transactions contemplated
by this Agreement shall have been paid. [NOTE: ARRANGEMENT FEE IS PAID UPON
SIGNING.]
(o) Political Risk Insurance shall be in full force and effect and
all premiums and other costs associated therewith shall have been paid.
(p) The Management Agreements shall have been amended and be in form
and substance satisfactory to the Creditor and side letters with respect thereto
shall have been executed and delivered and be in form and substance satisfactory
to the Creditor in its sole discretion.
(q) The Brazilian Central Bank shall have approved OPIC providing
insurance in respect of the scheduled payments under the Conditional Sale
Agreements.
(r) The Creditor shall have received the Nextel Side Letter and a
post closing agreement in form and substance satisfactory to the Creditor in its
sole discretion.
(s) The Management Agreement with AirLink, Augustus Administracao a
Participacaos and Trunkline Telecomunicacoes e Services Ltda. (as intervening
party) and the Management Agreement with Multiponto Telecomunicacoes Ltda.,
AirLink and Trunking do Brasil Servicos de Telecomunicacoes Ltda. (as
intervening party) shall have been executed and delivered and be in form and
substance satisfactory to the Creditor in its sole discretion.
(t) The letter in respect of subrogation rights in favor of OPIC
shall have been executed and delivered.
(u) The lease in respect of the MSO Site shall have been amended and
be in form and substance satisfactory to the Creditor in its sole discretion.
10.02 CONDITIONS TO ALL ADVANCES.
The obligation of the Creditor to make any Advance to the Company upon the
occasion of each financing hereunder (including the initial Advance) is subject
to the further conditions precedent that:
(a) The Creditor shall have received a Request for Financing, an
Invoice and a Drawdown Certificate pursuant to Section 2.02 hereof.
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(b) On and as of the date of such Advance, (i) no Default, Event of
Default or default under any Credit Document or any System Document shall have
occurred and be continuing, (ii) the representations and warranties made by the
Company and each other Credit Party in the Credit Documents are true and correct
(other than those representations and warranties that are expressly made only as
of an earlier date), (iii) there has been no adverse change since the Closing
Date in the financial condition, assets or operations of the Company or any
other Credit Party which individually or in the aggregate could reasonably be
expected to have a Material Adverse Effect, (iv) no fire, explosion, accident,
strike, lockout or other labor dispute, drought, storm, hail, earthquake,
embargo, act of God or of the public enemy or other casualty (whether or not
covered by insurance) affecting the business or properties of the Company or any
other Credit Party shall have occurred which could reasonably be expected to
have a Material Adverse Effect, (v) since the Closing Date, there has been no
change in the status of the matters disclosed on Schedule 7.12 hereto that
individually or in the aggregate could reasonably be expected to have a Material
Adverse Effect, and (vi) the Creditor shall have received a certificate of a
duly Authorized Officer of the Company certifying as to the foregoing matters.
(c) The Creditor shall have received evidence that (i) all Required
Equity Investments then due shall have been made and deposited in the U.S.
Receipt Account pursuant to the Company Security Deposit Agreement, and (ii) the
amount reserved by Nextel International on its books for investment in the
System shall equal no less than the greater of (x) $70,291,124.70 MINUS the
Required Equity Investment made since the Closing Date in accordance with the
then Approved Business Plan, and (y) an amount equal to the Required Equity
Investments amount due on or prior to the next succeeding fiscal quarter in
accordance with the then current Approved Business Plan.
(d) None of the following events shall have occurred: (i) Brazil or
any Governmental Authority in Brazil shall have declared a moratorium on the
payment of indebtedness by Brazil or any Governmental Authority in Brazil or
corporations therein; (ii) Brazil shall have ceased to be a member in good
standing of the International Monetary Fund or shall have ceased to be eligible
to utilize the resources of the International Monetary Fund under the Articles
of Agreement thereof; or (iii) the international monetary reserves of Brazil
shall have become subject to any lien.
(e) (i) The Creditor shall have received from the Company, each
Majority-Owned Foreign Affiliate and Nextel International a list of all of
the assets of such Credit Party (in the case of Nextel International such
list shall be limited to any shares or quotas of record in respect of the
Company and any Foreign Affiliates) and a certificate for an Authorized
Officer of such Credit Party certifying to the accuracy and completeness of
such list.
(i) Each Credit Party shall have amended its Security Documents
as necessary to cover all personal property and fixtures acquired since the
Closing Date and executed and delivered mortgages with respect to real property
interests acquired since the Closing Date and shall have made all necessary
registrations, filings and recordings in order to create a first
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priority Lien in favor of the Creditor in such after acquired property and
shall have paid all costs, charges and expenses incidental thereto.
11. EVENTS OF DEFAULT
11.01 EVENTS OF DEFAULT.
Each of the following events shall constitute an Event of Default
hereunder:
(a) The Company shall have defaulted in the payment of principal of
any Advance payable under any of Credit Documents when and as the same shall
become due and payable.
(b) The Company shall have defaulted in the payment of any interest
on any Advance or any other amount (other than an amount referred to in clause
(a) of this Section 11.01) payable under this Agreement, when and as the same
shall become due and payable, and such failure shall continue unremedied for a
period of three or more Business Days.
(c) Any written representation or warranty made by the Company or any
other Credit Party herein or in any other Credit Document or otherwise in
connection herewith or therewith shall prove to have been incorrect or
misleading in any material respect as of time it was made or deemed to have been
made or any certificate or opinion furnished pursuant to any of the Credit
Documents proves to have been false or misleading in any material respect as of
its date; PROVIDED, that the foregoing shall not constitute an Event of Default
hereunder in respect of any representation or warranty made by any Credit Party
on behalf of an Option Company unless such incorrectness could reasonably be
expected to have a Material Adverse Effect, in the sole determination of the
Creditor.
(d) The Company shall, without the prior written consent of the
Creditor, have used the proceeds of any Advance for a purpose other than that
specified in Section 2.08 hereof.
(e) (i) Any Stockholder Guarantor, the Company or any Foreign
Affiliate shall fail to observe or perform any covenant, condition or agreement
covered in Sections 8.06, 8.08, 8.09, 8.12, 8.16, 8.17 and 8.19 and Section 9 of
this Agreement; PROVIDED that the foregoing shall not constitute an Event of
Default hereunder in respect of any failure by any Credit Party to cause
observance or performance by an Option Company unless such failure could
reasonably be expected to result in a Material Adverse Effect, in the sole
determination of the Creditor, (ii) the Company shall fail to observe or perform
any covenant, condition or agreement covered in Sections 1, 2, 3 and 8 of the
Company Security Deposit Agreement, and (iii) AirLink shall fail to observe or
perform any covenant, condition or agreement contained in Sections 1, 2, 3 and 8
of the AirLink Security Deposit Agreement.
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(f) The Company or any other Credit Party shall have failed to
perform or comply with any other term, obligation or covenant contained in any
of the Credit Documents to which it is a party (other than those specified
above) and such failure shall have continued unremedied for thirty (30) days
after written notice thereof has been given by the Creditor.
(g) Any Governmental Approval (including, without limitation,
registration with the Brazilian Central Bank) necessary to enable the Company or
any other Credit Party to comply with its obligations under the Operative
Documents shall have been revoked, suspended, withdrawn, withheld, terminated,
modified or restricted and such revocation, termination, withdrawal, suspension,
modification, withholding or cessation could reasonably be expected to have a
Material Adverse Effect, or any proceeding which could reasonably be expected to
have a Material Adverse Effect shall have been commenced by or before any
Governmental Authority for the purpose of so revoking, terminating, withdrawing,
suspending, modifying or withholding any such Governmental Approval and such
proceeding shall not have been contested within ten (10) Business days by proper
proceedings and dismissed or stayed within thirty (30) days, or notice shall
have been given by such Governmental Authority for such purpose and shall have
remained uncontested for ten (10) Business Days.
(h) Any License granted in favor of the Company or the Foreign
Affiliates, or any license or concession part thereof which, in the reasonable
opinion of the Creditor, shall have been terminated, revoked, suspended,
withdrawn, withheld, or adversely modified or restricted which termination,
revocation, suspension or such other action could reasonably be expected to have
a Material Adverse Effect or a proceeding shall have been initiated by or
before, or any action shall have been taken by a court of competent
jurisdiction, or other Governmental Authority which in the reasonable opinion of
the Creditor, is likely to result in the cancellation, non-renewal or adverse
modification of any one or more Licenses, radio channels authorized under the
Licenses or Governmental Approvals held by the Company or any of the Foreign
Affiliates which cancellation, non-renewal or adverse modification could
reasonably be expected to have a Material Adverse Effect.
(i) It shall have become unlawful for the Company to perform any
payment obligation under the Credit Documents or any Stockholder Guarantor to
perform its obligations under its Stockholder Guaranty or any Majority-Owned
Foreign Affiliate to perform its obligations under its Foreign Affiliate
Guaranty; PROVIDED, that the foregoing shall not constitute an Event of Default
in respect of any Stockholder Guarantor other than Nextel International if,
within five (5) Business Days after notice thereof by the Creditor to Nextel
International, Nextel International shall have assumed the liability of such
Stockholder Guarantor under the Nextel International Guaranty.
(j) Any of the Company, any Stockholder Guarantor or any Foreign
Affiliate shall have failed to pay money due under any other agreement or
document evidencing, securing, guarantying or otherwise relating to Indebtedness
of such Credit Party outstanding in the aggregate principal amount to or greater
than $1,000,000 in the case of the Company or any
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Foreign Affiliate, or $10,000,000 in the case of Nextel International or
any Stockholder Guarantor, or there shall have occurred any other event of
default or breach on the part of such Credit Party under any such
agreement or document, the effect of which is to accelerate or to permit
the acceleration of the maturity of such Indebtedness; PROVIDED, that the
foregoing shall not constitute an Event of Default in respect of any
Stockholder Guarantor other than Nextel International if, within five (5)
Business Days after notice thereof by the Creditor to Nextel
International, Nextel International shall have assumed the liability of
such Stockholder Guarantor under the Nextel International Guaranty.
(k) The issuance of any final arbitration award, judgment or decree
which is not subject to appeal, or any award, judgment or decree shall not have
been appealed within thirty (30) days from the date thereof, or a fine or
penalty aggregating in excess of $1,000,000 or its equivalent in any currency
shall have been entered against the Company and not paid and discharged,
dismissed or stayed within 30 days.
(l) Any of the Stockholder Guarantors, the Company or the Foreign
Affiliates shall have made an assignment for the benefit of the creditors, filed
a petition in bankruptcy, been adjudicated insolvent, petitioned or applied to
any tribunal for the appointment of a receiver, custodian, or any trustee for it
or a substantial part of its assets, or shall have commenced any proceeding
under any bankruptcy, reorganization, arrangement, readjustment of debt,
dissolution or liquidation law or statute of any jurisdiction, whether now or
hereafter in effect, or such Credit Party shall have taken any corporate action
to authorize any of the foregoing actions; or there shall have been filed any
such petition or application, or any such proceeding shall have been commenced
against it, that remains undismissed for a period of sixty (60) days or more; or
any order for relief shall have been entered in any such proceeding; or any such
Credit Party, by any act or omission, shall have indicated its consent to,
approval of or acquiescence in any such petition, application or proceeding; or
the appointment of a custodian, receiver or any trustee for it or any
substantial part of any of its properties, or shall have suffered any
custodianship, receivership or trusteeship to continue undischarged for a period
of sixty (60) days or more;
(m) Any of the Stockholder Guarantors, the Company or the Foreign
Affiliates shall become unable, admit in writing or fail generally to pay its
debts as they become due;
(n) Any of the Stockholder Guarantors, the Company or the Foreign
Affiliates shall have concealed, removed or permitted to be concealed or
removed, any part of its property, with intent to hinder, delay or defraud its
creditors or any of them or made or suffered a transfer of any of its property
that may be fraudulent under any bankruptcy, fraudulent conveyance or similar
law; or shall have made any transfer of its property to or for the benefit of a
creditor at a time when other creditors similarly situated have not been paid;
or shall have suffered or permitted, while insolvent, any creditor to obtain a
Lien upon any of its property through legal proceedings or distraint that is not
vacated within sixty (60) days from the date thereof.
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(o) Any Governmental Authority shall have taken any action to
condemn, seize, requisition, nationalize or otherwise appropriate any portion of
the properties or assets of any Credit Party (without payment of adequate
compensation), or shall have taken any action to dispute the management of such
Credit Party or to curtail such Credit Party's authority to conduct its
business, which prevents any Credit Party from fulfilling its obligations under
any of the Credit Documents.
(p) The Creditor shall fail at any time to have a valid and perfected
Lien on, subject to no prior or equal Liens other than Permitted Liens, any
portion of the Collateral.
(q) There is an actual or threatened claim by any Person other than
any Motorola Entity which would have the effect of creating a Lien over the
Collateral, other than Permitted Liens.
(r) The Political Risk Insurance ceases to be in full force and
effect for whatever reason and the Company shall fail to remedy the situation
for a period of thirty or more days.
(s) The termination of any Plan or the institution by the PBGC of
proceedings for the involuntary termination of any Plan, that, in either case,
could reasonably be expected to result in a liability on the part of the Company
to the PBGC in excess of $1,000,000.
(t) The occurrence of any event or condition that results or could
reasonably be expected to result in a material "accumulated funding deficiency"
under Section 412 of the Code with respect to any Plan.
(u) The failure by any Credit Party to make required contributions,
in accordance with the applicable provisions of ERISA, to each of the Plans
maintained or hereafter established or assumed by it where such failure could
reasonably be expected to have a Material Adverse Effect.
(v) There shall have occurred an Event of Abandonment.
(w) Nextel International shall have ceased to own, free of any liens
(other than Liens arising under the Credit Documents), and maintain, directly or
indirectly, 51% of the outstanding capital stock of the Company.
(x) There shall have occurred any change (direct or indirect) of
ownership of the Company which results in Nextel International ceasing to have a
controlling interest in the Company or the Company ceasing to have a controlling
interest in the Foreign Affiliates.
(y) Nextel International shall have ceased to have and to exercise
actual control of the day to day operations of the Company and the Foreign
Affiliates.
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(z) This Equipment Financing Agreement, the Financing Note, any
Stockholder Guaranty, any Foreign Affiliate Guaranty, the Security Documents, or
any other Credit Document shall, at any time after their respective execution
and delivery, and for any reason, shall be declared null and void, or be revoked
or terminated, or the validity or enforceability thereof or hereof shall be
contested by any Credit Party or any Credit Party shall deny that it has any or
further liability thereunder or hereunder as the case may be.
11.02 REMEDIES.
(a) Except as described in the immediately succeeding sentence, if an
Event of Default described in subsections 11.01(l), (m) and (n) hereof with
respect to the Company or any such other Credit Party shall have occurred, then
(i) the Commitment shall automatically be terminated and the obligation of the
Creditor shall forthwith terminate, and (ii) the entire unpaid principal amount
of the Advances hereunder shall automatically and immediately become due and
payable together with all interest accrued and unpaid thereon and all other
amounts payable hereunder to be forthwith due and payable without presentment,
demand, test or further notice of any kind, all of which are hereby expressly
waived by the Company. If any other Event of Default shall have occurred, then
at any time thereafter, if any such event shall then be continuing, the Creditor
may, by written notice to the Company, (i) declare the Commitment to be
terminated whereupon the obligation of the Creditor to make or maintain the
Advances hereunder shall forthwith terminate, and (ii) declare the entire unpaid
principal amount of the Advances, all interest accrued and unpaid thereon and
all other amounts payable hereunder to be forthwith due and payable without
presentment, demand, protest or further notice of any kind, all of which are
hereby expressly waived by the Company. Upon the occurrence of any Event of
Default, the Creditor shall have, in addition to any other rights and remedies
contained in this Agreement and the other Credit Documents, all of the rights
and remedies of a secured party under the laws of the United States and the laws
of Brazil or other applicable laws, all of which rights and remedies shall be
cumulative and non-exclusive, to the extent permitted by law.
(b) In addition to such remedies as are provided for in this
Agreement and the other Credit Documents, the Creditor's remedies upon the
occurrence and during the continuance of an Event of Default shall include (i) a
right to apply or require the Company to apply for any necessary orders or
licenses in connection with the operation or abandonment of the System, the
Telecommunications Business or any part thereof; and (ii) to the extent
permitted by law, a right to have a receiver appointed by a court of competent
jurisdiction in order to manage, protect and preserve the System, the
Telecommunications Business and all other equipment, property and other
collateral and to continue the operation of the business of the Company, and to
collect the revenues and profits thereof and apply the same to the payment of
all expenses and other charges of such receivership until the sale or other
final disposition of the Collateral, including without limitation, the System,
the Telecommunications Business and such equipment, property and assets
mortgaged or pledged to the Creditor.
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(c) The Company agrees, in case an Event of Default shall be existing
and upon the Creditor's request, to assemble, at its expense, all equipment
constituting a part of the Collateral at a convenient place acceptable to the
Creditor and to pay all the Creditor's costs of collection of all amounts
due, and enforcement of all rights hereunder, including reasonable attorney's
fees and legal expenses, and expenses of any repairs to any realty or other
property to which any of such equipment may be affixed or be part. Upon an
Event of Default, the Creditor may, to the fullest extent permitted by
applicable law, without notice, advertisement, hearing or process of law of
any kind (i) to the extent permitted by law, enter upon any premises where
any of the equipment constituting part of the Collateral may be located and
take possession of and remove such equipment, (ii) sell any or all of such
equipment, free of all rights and claims of the Company therein and thereto,
at any public or private sale, and (iii) to the extent permitted by law, bid
for and purchase any or all of such equipment at any such sale.
(d) The Creditor may, upon the occurrence and during the continuance of
an Event of Default, without demand and without advertisement or notice, all
of which the Company waives at any time or times, sell and deliver, any or
all Collateral held by or for it at public or private sale, for cash, upon
credit, or otherwise, at such prices and upon such terms as the Creditor
deems advisable, in its sole discretion and/or collect or enforce the
collection of, the Collateral; provided, however that method, manner, time,
place and terms of any sale must be commercially reasonable and the Creditor
shall make a reasonable attempt to receive fair market value for any
Collateral subject to such sale. In addition to all other sums due to the
Creditor, the Company, shall pay the Creditor all reasonable costs and
expenses incurred by the Creditor including attorney's fees and court costs,
to obtain, liquidate and/or enforce payment of Collateral obligations or in
the prosecution or defense of any action or proceeding against the Creditor
concerning any matter arising out of or connected with the Credit Documents
or the Collateral.
(e) In connection with the enforcement by the Creditor of any remedies
available to it as a result of any Event of Default, the Company and Nextel
International shall join and cooperate fully with the Creditor and with any
receiver referred to above and with the successful bidder or bidders at any
foreclosure sale when any of these entitles files an application (including
the furnishing of any additional information that may be required in
connection with such application), with any necessary Governmental
Authorities, requesting their prior approval of (i) the operation or
abandonment of all or any portion of the System or the Telecommunications
Business and (ii) the assignment or transfer to such entity of all licenses,
authorizations and permits issued to the Company or any other Credit Party by
such Governmental Authorities with respect to the System, the
Telecommunications Business and the operation thereof.
(f) In connection with the foregoing remedies, the Company and Nextel
International shall take such further actions and execute all such
instruments as the Creditor deems necessary. The Company agrees that the
Creditor may enforce any obligation of the Company as set forth in this
Agreement by an action for specific performance.
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(g) The Creditor may (but shall not be obligated to) make advances to
preserve, protect or obtain any of the Collateral, including advances to pay
taxes, insurance and the like, and all such advances shall become part of the
obligations owing to the Creditor hereunder and shall be repayable to the
Creditor with interest thereon from the date of such advance until paid at
the rate per annum of 2% above the average interest rate applicable to the
Financing Note on the date of such advance.
(h) The Creditor shall be deemed to have exercised reasonable care in
the custody and preservation of any of the Collateral in its possession if it
takes such action for that purpose as the Company requests in writing, but
failure of the Creditor to comply with any such request shall not of itself
be deemed a failure to exercise reasonable care, and no failure of the
Creditor to preserve or protect any rights with respect to such Collateral
against prior parties, or to do any act with respect to the preservation of
such Collateral not so requested by the Company, shall be deemed a failure to
exercise reasonable care in the custody or preservation of such Collateral.
(i) All moneys received by the Creditor pursuant to any right given or
action taken under Section 11 of this Agreement shall be applied as follows:
FIRST - To the reimbursement to the Creditor of all reasonable
expenses and costs of litigation and of any proceedings resulting in the
collection of such moneys, including, without limitation, attorney's fees,
receivership, collection, maintenance, improvements and other acts of
administration and sale of properties;
SECOND - To the payment of the unpaid principal of and interest on
any Advance which shall have become due and payable and other fees, costs and
expenses which the Company is required to pay from time to time to the
Creditor under or pursuant to this Agreement or any other Credit Document, as
well as all other obligations, covenants, undertakings and liabilities of the
Company to the Creditor arising out of or in connection with this Agreement
or any other Credit Document, which shall have become due and payable in such
order as the Creditor may decide; and
THIRD - The balance, if any, shall be delivered and paid to the
Company.
(j) In addition to its rights with respect to the Collateral hereunder,
upon the occurrence of an Event of Default, the Creditor may seek payment of
the outstanding obligations from the Stockholder Guarantors or the Foreign
Affiliates. The Creditor shall not, however, proceed to liquidate the
Collateral hereunder and under the Stockholder Guaranties and the Foreign
Affiliate Guaranties in excess of the amount which the Creditor reasonably
determines will be necessary to satisfy the outstanding obligations which
have become due and payable, provided, that the Creditor may continue so to
liquidate until all outstanding obligations which have become due and payable
have been satisfied in full.
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(k) The Creditor may exercise any and all of its remedies under the
Security Documents, the Stockholder Guaranties and the Foreign Affiliate
Guaranties contemporaneously or separately from the exercise of any other
remedies hereunder or with respect to any Collateral.
11.03 CUMULATIVE RIGHTS.
No failure or delay on the part of the Creditor in exercising any right,
power or remedy accruing to it upon any breach or default of the Company
under any of the Credit Documents shall impair any such right, power or
remedy nor shall it be construed as a waiver of any such breach or default
thereafter occurring, nor shall a waiver of any single breach or default be
deemed a waiver of any other breach or default theretofore or thereafter
occurring, nor shall any single or partial exercise of any such right or
power preclude any other or further exercise thereof or the exercise of any
other right or power hereunder. To the fullest extent permitted by law, all
remedies, either under the Credit Documents or by law otherwise afforded the
Creditor shall be cumulative and not alternative.
11.04 WAIVER OF DEMAND.
DEMAND, PRESENTMENT, PROTEST AND NOTICE OF DEMAND, PRESENTMENT, PROTEST
AND NONPAYMENT ARE HEREBY WAIVED TO THE EXTENT PERMITTED BY LAW BY THE
COMPANY. THE COMPANY ALSO WAIVES THE BENEFIT OF ALL VALUATION, APPRAISAL AND
EXEMPTION LAWS TO THE EXTENT PERMITTED BY LAW.
11.05 WAIVER OF NOTICE.
IN THE EVENT OF AN EVENT OF DEFAULT, THE COMPANY HEREBY WAIVES TO THE
EXTENT PERMITTED BY LAW ALL RIGHTS TO NOTICE AND HEARING OF ANY KIND PRIOR TO
THE EXERCISE BY THE CREDITOR OF ITS RIGHTS TO REPOSSESS ANY COLLATERAL
WITHOUT JUDICIAL PROCESS OR TO REPLEVY, ATTACH OR LEVY UPON ANY COLLATERAL
WITHOUT PRIOR NOTICE OR HEARING. THE COMPANY ACKNOWLEDGES THAT IT HAS BEEN
ADVISED BY COUNSEL OF ITS CHOICE WITH RESPECT TO THIS TRANSACTION AND THIS
AGREEMENT.
12. MISCELLANEOUS
12.01 WAIVER OF SOVEREIGN IMMUNITY.
To the extent that the Company, Nextel International, the Foreign
Affiliates or any of their respective assets has or hereafter may acquire any
right to immunity from suit, set-off, legal proceedings generally, attachment
prior to judgment, attachment in aid of execution or
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other attachment or execution of judgment on the grounds of sovereignty or
otherwise, each of the Company and Nextel International hereby irrevocably
waives such rights to immunity for itself and its assets in respect of its
obligations arising under or relating to any of the Credit Documents or any
related documentation.
12.02 VENUE FOR SUIT.
Each of the Company and Nextel International irrevocably hereby expressly
waives all right to object to jurisdiction or execution in any legal action
or proceeding relating to this Agreement, the Financing Note or any other
Credit Document which it may now or hereafter have by reason of its domicile
or by reason of any subsequent or other domicile and hereby irrevocably
consents that any legal action, suit or proceeding arising out of or relating
to any of the Credit Documents and any other document or instrument required
to be executed in relation thereto may be instituted exclusively in the
federal courts of the United States District Court of the Southern District
of New York and the courts of the State of New York, unless the Creditor
otherwise elects, and by execution and delivery of this Agreement, each of
the Company and Nextel International submits to and accepts and consents with
regard to any such action or proceeding for itself and in respect of its
properties and assets, generally and unconditionally, the jurisdiction of any
such court. Each of the Company and Nextel International hereby waives any
objection it may now or hereafter have to the laying of the venue of any such
action, suit or proceeding, and further waives any claim that any such
action, suit or proceeding brought in any of the aforesaid courts has been
brought in any inconvenient forum.
Each the Company and Nextel International hereby irrevocably designates,
appoints and empowers CT Corporation System with offices at 0000 Xxxxxxxx,
Xxx Xxxx, Xxx Xxxx 00000, and successors as the designee, appointee and agent
of such Credit Party to receive, accept and acknowledge, for and on behalf of
such Credit Party and its properties, service of any and all legal process,
summons, notices and documents which may be served in such action, suit or
proceeding relating to the Financing Note or this Agreement or any other
Credit Document in the case of the courts of the United States District Court
of the Southern District of New York or of the courts of the State of New
York, which service may be made on any such designee, appointee and agent in
accordance with legal procedures prescribed for such courts. Each of the
Company and Nextel International agrees to take any and all action necessary
to continue such designation in full force and effect and should such
designee, appointee and agent become unavailable for this purpose for any
reason, the Company or Nextel International (as appropriate) will forthwith
irrevocably designate a new designee, appointee and agent with offices in New
York, New York, which shall irrevocably agree to act as such, with the powers
and for purposes specified in this Section 12.02. Each of the Company and
Nextel International further irrevocably consents and agrees to service of
any and all legal process, summons, notices and documents out of any of the
aforesaid courts in any such action, suit or proceeding relating to the
Financing Note or this Agreement or any other Credit Document delivered to
the Company or Nextel International (as appropriate) in accordance with this
Section 12.02 or to its then
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designee, appointee or agent for service. If service is made upon such
designee, appointee and agent, a copy of such process, summons, notice or
document shall also be provided to the Company or Nextel International (as
appropriate), by registered or certified mail, or overnight exprss air
courier, provided that failure to provide such copy to the Company or Nextel
International (as appropriate) shall not impair or affect in any way the
validity of such service or any judgment rendered in such action or
proceedings. Each of the Company and Nextel International agrees that
service upon the Company or Nextel International (as appropriate) or any such
designee, appointee and agent as provided for herein shall constitute valid
and effective personal service upon the Company or Nextel International (as
appropriate) with respect to matters contemplated in this Section 12.02 and
that the failure of any such designee, appointee and agent to give any notice
of such service to the Company or Nextel International (as appropriate) shall
not impair or affect in any way the validity of such service or any judgment
rendered in any action or proceeding based thereon. Nothing herein shall
limit or be construed to limit the rights of the Creditor to commence
proceedings against the Company or Nextel International (as appropriate) in
any other venue where assets of the Company or Nextel International (as
appropriate) may be found.
12.03 GOVERNING LAW.
THIS AGREEMENT AND THE FINANCING NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK (INCLUDING SECTION
5-1401 OF THE NEW YORK GENERAL OBLIGATIONS LAW AND EXCLUDING ALL OTHER
CHOICE-OF-LAW AND CONFLICTS-OF-LAWS RULES).
12.04 SEVERABILITY OF PROVISIONS.
If any one or more of the provisions contained in this Agreement or any
documents executed in connections herewith shall be invalid, illegal or
unenforceable in any respect, the validity, legality and enforceability of
the remaining provisions contained herein shall not in any way be affected or
impaired.
12.05 BINDING EFFECT; ASSIGNMENT.
This Agreement shall be binding upon and shall inure to the benefit of
the Company, the Creditor and their respective successors and assigns,
PROVIDED, that the Company shall not have the right to assign or transfer its
rights or obligations hereunder except with the prior written consent of the
Creditor.
The Creditor may assign its rights and obligations under this Agreement
(including all or a portion of the Commitment and the Advances at the time
owing to it without the consent of the Company (the "SYNDICATION"). The
Creditor may request the Company and Nextel International to assist in the
Syndication as contemplated by this Section.
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In addition to and without limiting the foregoing, the Creditor may,
without the consent of the Company, sell participations to one or more banks
or other entities (a "PARTICIPANT") in all or a portion of the Creditor's
rights and obligations under this Agreement (including all or a portion of
the Commitment and the Advances owing to it); PROVIDED that (i) the
Creditor's obligations under this Agreement shall remain unchanged, (ii) the
Creditor shall remain solely responsible to the other parties hereto for the
performance of such obligations, and (iii) the Company shall continue to deal
solely and directly with the Creditor in connection with the Creditor's
rights and obligations under this Agreement. Any agreement or instrument
pursuant to which the Creditor sells such a participation shall provide that
the Creditor shall retain the sole right to enforce this Agreement and to
approve any amendment, modification or waiver of any provision of this
Agreement.
Each of the Company and Nextel International agrees to cooperate with the
Creditor in connection with any Syndication. Such cooperation will include,
if requested by the Creditor, (i) making senior officers of the Company and
Nextel International available for a meeting with prospective assignees, the
Creditor and its agents, and (ii) providing such other assistance as may be
reasonably requested by the Creditor and such agents (including providing
information to and responding to questions from prospective assignees with
respect to the operations, business plans and other matters relating to the
Company's and each other Credit Party's business on a timely basis and in any
manner reasonably requested by the Creditor).
12.06 ENTIRE AGREEMENT; AMENDMENTS.
This Agreement, the documents referred to herein and those signed
contemporaneously herewith constitute the entire agreement of the parties
with respect to the subject matter hereof and shall supersede any prior
expressions of intent or understanding with respect to this transaction. Any
amendment to this Agreement shall be in writing signed by or on behalf of the
party to be bound or burdened thereby.
12.07 NOTICES.
All communications and notices provided for hereunder shall be in writing
and shall be personally delivered or transmitted by postage prepared
registered mail (airmail if international) or by telefax as follows:
To the Company: XxXxx International (Brazil), Ltd.
c/o Nextel International, Inc.
0000 Xxxxxx Xxxxxx, Xxxxx 0000
Xxxxxxx, Xxxxxxxxxx 00000
Attention: General Counsel
Fax No.: (000) 000-0000
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To the Creditor: Motorola Credit Corporation
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxx X. Xxxxx
Fax No.: (000) 000-0000
with a copy to: Motorola Credit Corporation
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Finance Counsel
Fax No.: (000) 000-0000
To the Vendor: Motorola, Inc.
0000 Xxxx Xxxxxxxxx Xxxx
Xxxxxxxxxx, Xxxxxxxx 00000-0000
Attention: Xxxxxx X. XxXxxxxx, Esq.
Fax No.: (000) 000-0000
Except as otherwise specified herein, all notices shall be deemed duly
given on the date of receipt, if personally delivered or transmitted by
telefax, and the date 15 days after posting if mailed.
12.08 RIGHT OF SET-OFF.
The Creditor shall, to the fullest extent permitted by applicable law,
have the right to apply and all amounts on deposit or on account with it or
with any of its branches, subsidiaries or affiliates (general or special,
time or demand, matured or unmatured, in whatever currency) in reduction of
amounts past due (whether such amounts became due at schedule maturity, by
acceleration or otherwise) under the Credit Documents.
12.09 COUNTERPARTS.
This Agreement may be executed in any number of counterparts, each of
which shall be an original but all of which together shall constitute one
instrument. Each counterpart may consist of a number of copies thereof, each
signed by less than all, but together signed by all, of the parties hereto.
SECTION 12.10 PROPOSED CONSOLIDATION.
The Creditor and the Company agree that Proposed Consolidation may be
consummated, so long as such consummation is in full compliance with the
conditions set forth in Section 9.05 hereof.
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SECTION 12.11 TERMINATION OF STOCKHOLDER GUARANTOR'S OBLIGATIONS.
On and after the Project Completion Date, Nextel International and each
other Stockholder Guarantor shall be irrevocably released from and no longer
be bound by any of the covenants and provisions hereof to the extent they
solely impose obligations on it other than Nextel International's Obligations
under Section 8.09 and subsection 9.06(b) hereof (which Obligations shall
survive until all of the Obligations hereunder and the other Credit Documents
has been satisfied and this Agreement has terminated), and the
representations and warranties set forth in Section 7 hereof shall cease to
apply to Nextel International and none of the Events of Default except those
in subsection 11.01(w), (x) and (y) shall be deemed to apply to Nextel
International.
SECTION 12.12 CONFIDENTIALITY.
Each of the Company, Nextel International and the Creditor hereby agrees
to maintain the confidentiality of the Information (as defined below), except
that Information may be disclosed (a) to its Affiliates, directors, offices,
employees and agents, including accountants, legal counsel and other advisors
(it being understood that the Persons to whom such disclosure is made will be
informed of the confidential nature of such Information and instructed to
keep such Information confidential), (b) to the extent requested by any
regulatory authority, (c) to the extent required by applicable laws or
regulations or by any subpoena or similar legal process, (d) to any other
party to this Agreement, (e) in connection with the exercise of any remedies
hereunder or any suit, action or proceeding relating to this Agreement or the
enforcement of rights hereunder, (f) subject to the execution and delivery of
an agreement containing provisions substantially the same as those of this
Section 12.12, to any assignee of or participant in, or any prospective
assignee of or participant in, any of its rights or obligations under this
Agreement, (g) with the consent of the other parties hereto, or (h) to the
extent such Information (i) becomes publicly available other than as a result
of a breach of this Section 12.12 or (ii) becomes available to such party on
a nonconfidential basis from a source other than the other parties hereto.
For the purposes of this Section 12.12, "INFORMATION" means all
information received from any of the parties hereto relating to any of the
Credit Parties, the Creditor or their respective businesses, other than any
such information that is available to the parties hereto on a nonconfidential
basis prior to disclosure by any party hereto; PROVIDED THAT, in the case of
information received from any party hereto after the date hereof, such
information is clearly identified at the time of delivery as confidential.
Any Person required to maintain the confidentiality of Information as
provided in this Section 12.12 shall be considered to have complied with its
obligation to do so if such Person has exercised the same degree of care to
maintain the confidentiality of such Information as such Person would accord
to its own confidential information.
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SECTION 12.13 TERM OF AGREEMENT.
This Agreement shall continue in full force and effect, and be binding
upon the Company, until all of the Obligations have been fully and
indefeasibly paid and performed whereupon this Agreement shall terminate;
PROVIDED, HOWEVER, if the initial Advance has not been made by November 21,
1997, this Agreement shall terminate. Notwithstanding the foregoing, all the
indemnification provisions shall survive and all other provisions which by
their terms survive termination shall so survive.
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IT WITNESS WHEREOF, the parties hereto have caused this Agreement to be
executed by their respective duly authorized signatories as of the day and
year first written above.
Company: XXXXX INTERNATIONAL (BRAZIL), LTD.
By: /s/ XXXXX X. ROSTOV
--------------------------
Name: Xxxxx X. Rostov
Title: Senior Vice President
By:
--------------------------
Name:
Title:
Creditor: MOTOROLA CREDIT CORPORATION
By: /s/ XXXX XXXXX
--------------------------
Name: Xxxx Xxxxx
Title: Vice President
ACKNOWLEDGED AND AGREED:
NEXTEL INTERNATIONAL, INC.
By: /s/ XXXXX X. ROSTOV
-------------------------
Name: Xxxxx X. Rostov
Title: Senior Vice President
[SIGNATURE PAGE TO EQUIPMENT FINANCING AGREEMENT]
